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The hippies," claimed economist Andrew Oswald recently, "are having their quiet revenge." Oswald, a professor at Warwick University in England, is one of a growing number of economists fascinated by the question of what makes us happy. In a recent public lecture he announced, "Once a country has filled its larders, there is no point in that nation becoming richer."

That, at least, should bring a smile to a few faces. Economists have suddenly realized that money can't buy you happiness? This is like the squarest kid at school suddenly discovering beer, girls and music in his 30s. The rest of the world had worked it out already.

One of the things that excites economists like Oswald is the ability to compare data on wealth, education and marital status with the results of happiness surveys. In these surveys, people are asked such questions as "Taking all things together, would you say you are very happy, quite happy, not very happy, not at all happy?" Economists have been trying to make sense of the results across individuals, across countries and across the years. The headline: Once a country gets fairly rich (though much poorer than the United States), further economic growth does not seem to make its citizens any happier.

So, money does not buy happiness. Or does it? "In every society, at any point in time, richer people are happier," points out Will Wilkinson, a policy analyst at the Cato Institute in Washington D.C., who runs a blog on happiness research and public policy. "But that in itself doesn't tell you much about the relationship between money and happiness."

Richer people, after all, tend to have high-status jobs. They tend to have more control over their lives at work--why pay someone six figures if you're not going to ask her to use her own judgment? They also have higher expectations and will be comparing themselves to wealthier people. It's hard to say what is really driving the results: money, status or expectations.

Perhaps each society's richer people are also happier because happiness comes not from absolute wealth but from relative wealth--recall H.L. Mencken's quip that "a wealthy man is one who earns $100 a year more than his wife's sister's husband." A more skeptical view is that while it means something to compare my happiness with that of the guy asking me for change on the street, it means nothing to compare my feelings today to those of my grandfather in 1950--or those of a Portuguese shopkeeper or a Japanese salaryman.

Wilkinson and economists like Oswald and his compatriot Lord Layard are thinking about the policy implications of happiness research. My own interest is a little different: Can the new breed of happiness economists offer us any tips for happier living?

Much of the advice is pretty slippery. For instance, married people are much happier than single people. So perhaps you should get married? (Even better if your fiance's sister's husband is unemployed.) Not so fast. More sophisticated surveys show that the causation runs both ways: Happy people tend to find spouses, while those suffering from depression don't find it so easy. And--not surprisingly--some people do brilliantly out of marriage, and others are utterly miserable. As an economist, I'm afraid I have no idea whether you should propose to that cute girl you've been seeing. (You may or may not take comfort in Oswald's finding that you can always get out of marriage: People are happier immediately after a divorce than immediately before.)

Oswald also suggests self-employment, if you can pull it off without losing out financially. "Everything associated with self-employment--independence, autonomy--is also associated with being happy."

Both Oswald and Richard Layard argue that relationships are more important than money--and that includes professional relationships. "I've come to believe in the old-fashioned view that one should be tender in one's dealings with colleagues," Lord Layard told me in an interview. And what else? "Think about what you have rather than what you don't have, both materially and in your relationships and your personal strengths. To use the language of economics, don't try to rectify things that aren't your comparative advantage."

This is spiritual thinking from an economist, but Oswald goes one better. If you're depressed, why not just wait? "There's a kind of J-curve describing happiness over time. Your late 30s are the most unhappy period of your life, but then the older you get the happier you are. Life really does begin again at 40."

I think the most useful research, though, is by an honorary economist: Danny Kahneman, the only psychologist ever to win the Nobel Prize in economics. He asked nearly 1,000 working women in Texas to reflect on their previous day, list the different episodes in it, what they were doing and how they were feeling.

Some results are predictable enough: Work is miserable, and commuting is worse. Others are not so obvious. For instance, praying is fun, but looking after the kids is not. Spending time with your friends is one of the most enjoyable things you can do, but spending time with your spouse is merely OK. In fact, parents or other relatives turn out to make more enjoyable company than the supposed love of your life.

What is perfectly clear, though, is that socializing with anyone except your boss makes you feel good. Sex is best of all. This is handy advice at last. But what if you are having sex with your boss? Whereof economists cannot speak, we must remain silent.

Tim Harford, a Financial Times columnist, is the author of The Undercover Economist.

 

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So, money does not buy happiness. Or does it? "In every society, at any point in time, richer people are happier," points out Will Wilkinson, a policy analyst at the Cato Institute in Washington D.C., who runs a blog on happiness research and public policy. "But that in itself doesn't tell you much about the relationship between money and happiness."

Richer people, after all, tend to have high-status jobs. They tend to have more control over their lives at work--why pay someone six figures if you're not going to ask her to use her own judgment? They also have higher expectations and will be comparing themselves to wealthier people. It's hard to say what is really driving the results: money, status or expectations.

Perhaps each society's richer people are also happier because happiness comes not from absolute wealth but from relative wealth--recall H.L. Mencken's quip that "a wealthy man is one who earns $100 a year more than his wife's sister's husband." A more skeptical view is that while it means something to compare my happiness with that of the guy asking me for change on the street, it means nothing to compare my feelings today to those of my grandfather in 1950--or those of a Portuguese shopkeeper or a Japanese salaryman.

Wilkinson and economists like Oswald and his compatriot Lord Layard are thinking about the policy implications of happiness research. My own interest is a little different: Can the new breed of happiness economists offer us any tips for happier living?

Much of the advice is pretty slippery. For instance, married people are much happier than single people. So perhaps you should get married? (Even better if your fiance's sister's husband is unemployed.) Not so fast. More sophisticated surveys show that the causation runs both ways: Happy people tend to find spouses, while those suffering from depression don't find it so easy. And--not surprisingly--some people do brilliantly out of marriage, and others are utterly miserable. As an economist, I'm afraid I have no idea whether you should propose to that cute girl you've been seeing. (You may or may not take comfort in Oswald's finding that you can always get out of marriage: People are happier immediately after a divorce than immediately before.)

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Both Oswald and Richard Layard argue that relationships are more important than money--and that includes professional relationships. "I've come to believe in the old-fashioned view that one should be tender in one's dealings with colleagues," Lord Layard told me in an interview. And what else? "Think about what you have rather than what you don't have, both materially and in your relationships and your personal strengths. To use the language of economics, don't try to rectify things that aren't your comparative advantage."

This is spiritual thinking from an economist, but Oswald goes one better. If you're depressed, why not just wait? "There's a kind of J-curve describing happiness over time. Your late 30s are the most unhappy period of your life, but then the older you get the happier you are. Life really does begin again at 40."

I think the most useful research, though, is by an honorary economist: Danny Kahneman, the only psychologist ever to win the Nobel Prize in economics. He asked nearly 1,000 working women in Texas to reflect on their previous day, list the different episodes in it, what they were doing and how they were feeling.

Some results are predictable enough: Work is miserable, and commuting is worse. Others are not so obvious. For instance, praying is fun, but looking after the kids is not. Spending time with your friends is one of the most enjoyable things you can do, but spending time with your spouse is merely OK. In fact, parents or other relatives turn out to make more enjoyable company than the supposed love of your life.

What is perfectly clear, though, is that socializing with anyone except your boss makes you feel good. Sex is best of all. This is handy advice at last. But what if you are having sex with your boss? Whereof economists cannot speak, we must remain silent.

Tim Harford, a Financial Times columnist, is the author of The Undercover Economist.

 

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