The Economics of Happiness, Inequality, and Envy

Here is an interesting video on the topics of happiness, inequality, and envy as seen by economists.

Video Introduction (Via Library Of Economics)

Richard Epstein of the University of Chicago talks with EconTalk host Russ Roberts about the relationship between happiness and wealth, the effects of inequality on happiness, and the economics of envy and altruism. He also applies the theory of evolution to explain some of the findings of the happiness literature.

Excerpts (Via Library Of Economics)

“Happiness research in economics. Standard models of economics assume people have well-ordered utility functions. Social progress in this model comes from two agencies: since you know that people are selfish, trade generates mutual gains, local improvement; if selfish and take from someone else, gain and someone else loses, so prohibition of force.”

“Used by environmentalists, anti-growth. If you are very poor, increases in material well-being do lead to gains in happiness but not after a while. Neoclassical answers to the environmental question. Environmentalists: We really want gas to be $4/gallon because people will drive less. Giving up a lot of consumption, though. Right way to do this is to have a tax on pollution. Happiness proponents would say: all that extra consumption is an illusion. Don’t get any happier driving around, should spend more time with your family.”

“nvy. Theme in literature, working paper, tension: wealth doesn’t make you happy but relative wealth seems to be very important in these studies. Complicated literature: truth within limits. Assume group of people who all have about the same wealth. Within this group, one popular, one nerd or doormat. Informal social rankings; competitive; if someone has high status, someone else inevitably has to have a low status.”

Click Here to Access The Video on Happiness, Inequality, and Envy

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18. November 2008 by Miguel Barbosa
Categories: Curated Readings, Finance & Investing | Leave a comment

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