Happiness is a relative concept. Specifically, how happy you are depends on what your aspirations are, or how high you set the bar. For instance, if you are a blue-collar worker with a relatively low salary, and your current goal is to go on a camping trip to the Rockies, and you can do it, then, ceteris paribus, you are probably happier than a rich investment banker whose goal is to buy a private island but cannot do it because his bonus wasn’t as high as expected.
Of course an economist might ask, does the probability that one’s aspirations are fulfilled vary with income? One would expect that the answer is yes. But actually, it is not always the case. Indeed, if you assume aspirations don’t differ much by socioeconomic status, then of course higher income individuals should be in a better position to fulfill them.
Risk preferences (i.e. whether someone likes or dislikes risk) are important for a variety of decisions. These include for instance career choice or financial decisions. But just how much do risk preferences vary over one’s lifetime?
Studies have shown that there can be macro shocks to risk attitudes. This could happen for instance when natural disasters, civil conflicts or financial crises happen. Micro (individual) level shocks to risk preferences have also been documented in case of job displacement or serious health diagnoses. This post presents evidence that becoming a parent also affects risk preferences.
We all know sleep is essential to ensure we have enough energy during the day. Yet a lot of people suffer from sleep deprivation. This can be a huge issue as it can lead to lower productivity and lack of alertness, which may even culminate in lower economic growth.
But forget about economic growth for the moment, let’s concentrate on something that individuals may care much more about: life satisfaction. Does sleep duration affect life satisfaction? You bet. In fact, it turns out the average individual sleeps about an hour less than what would maximize their life satisfaction.
Dishonesty perpetuates everyday life, especially in the form of small cheating that happens on a massive scale. Think of using public transportation without paying, cheating on taxes or stealing from the workplace. Cheating can cause larger scale problems as it can undermine trust, which is well-known to be associated with e.g. economic growth.
But cheating is heavily context-dependent. People are more likely to cheat in certain situations than in others. The question that then arises is in what contexts cheating is more common, what settings lead to more dishonesty.
It is a fact that kids from more advantageous backgrounds have better life outcomes: kids whose parents are richer and/or educated are themselves more likely to be rich and educated. Why is this the case?
Of course, there is a lack of social mobility involved: rich kids have better opportunities. But today, in most developed countries, poor kids have the very same opportunities in theory. This is because education all the way through high school (and in many countries even beyond that) is free or heavily subsidized. What is it then that makes kids from a more advantageous background more successful? On what dimensions do these kids differ from disadvantaged ones? And does socioeconomic status matter once we account for these differences?
Extreme beliefs can easily lead to conflicts between groups. But how do such beliefs arise? Are certain people simply bound to be extremists? Or can significant pockets of extremism arise out of social interactions among moderate individuals?
In other words, the question we are after is how people are radicalized within a society.
Intuitively, it’s easy to see how piracy could have both positive and negative effects on sales. It can complement sales by exposing a wider audience to the products, who otherwise would have not even thought about purchasing it. On the other hand, clearly if a product’s available for free online, one may not go through with the purchase.
Research on this topic seems to suffer from small sample sizes. Another problem is that of causality: sales and piracy can both be expected to affect the other.