Random thoughts on happiness: how to be happy?

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.

Are parents more risk-averse?

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.

Sleep duration and life satisfaction

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.

The origins of dishonesty

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.

Why are richer people more successful?

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?

How are radicals created?

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.

The effect of piracy on sales

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.

Through what channels does personality operate?

The effects of noncognitive traits such as personality on various life outcomes are well-documented, though potentially different across cultures. In particular, personality traits have been found to have a significant effect on income.

A question that remains to be answered, however, is through what channels personality traits operate. Do they affect wages because they make people more productive, or do people with certain traits self-select into occupations with higher wages? Maybe, certain personality traits are just correlated with better bargaining skills?

What are your cultural values?

Have you ever wondered which country fits your cultural and other values best? Where do people think the most like you? Even if you never thought about these questions, you might be interested in the answer. If yes, do read on.

To put it short, based on the World Values Survey‘s questions and results, I developed an online questionnaire that compares your answers to various questions with what people all over the world responded to the very same questions. Without any further due, here is the link to the questionnaire. Enjoy. Below I detail the methodology behind the questionnaire for those interested.

Personality traits and school performance

The role of cognitive traits in predicting school and life outcomes is well-documented. But what about noncognitive traits such as personality? Do they have an effect and if yes how important is it?

Readers of this blog might remember an earlier article, which showed that personality has little effect on long-term outcomes such as GPAs, but a significant effect on one-time high-stakes test performance.