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Could an economist from the University of Southern California win the Nobel Prize in Economics? Not last year, but maybe this. Maybe.
The Nobel Prize in Economics will be announced on Monday. Some predictions can be found here — and they include Robert Shiller, who will be well known to readers of the DeBord report for developing, with fellow economist Karl Case, the Case-Shiller home price index, which comes out every month and tracks home prices in 20 U.S. cities. Shiller would be a commendable winner, but...
Last year, I posted on the lead-up to the Economics prize, suggesting that maybe, perhaps, a worthy winner would be Southern California's own Richard Easterlin. Easterlin has since cropped up several more times in this blog (he's always gracious with his time and generous with his insights), and it would be false of me to suggest that, in good hometown fashion, I'm not rooting for the father of happiness economics, still working away at USC, to nab some of that Swedish hardware.
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The National Debt Clock, a billboard-size digital display showing the increasing US debt, is seen on the corner of Sixth Avenue and West 44th Street on August 1, 2011 in New York City. It's higher now.
CNN's Jack Cafferty (or his staff) should read a bit deeper into the source material the guy uses for his "Cafferty File" blog. In a post today — and later in an on-air segment — he referenced a recent report from the Organization for Economic Co-operation and Development (OECD), a Paris-based group that, among other things, studies the economic well-being of different countries.
The OECD's Better Life Index doesn't really "rank" countries in terms of life satisfaction. Rather, it's what it says it is: an index of numerous factors that affect happiness.
However, 24/7 Wall St. has studied the data and generated a top 10 list.
Or a top 11 list, because eleventh is where the U.S ranks. Denmark is number one. The countries that aren't in Northern Europe are Israel (They live a long time!), Canada (Socialized medicine!), and Australia (Beaches!).
Chinese students look at a newspaper outside an employment fair in Hefei, in east China's Anhui province. China's economy has been booming. But are it's citizens really happy?
I've written about Richard Easterlin here before. He's a noted economist and professor at the University of Southern California who's often credited with pioneering "happiness" as a worthy subject for economists to study. He even has an economic concept named after him, the so-called "Easterlin Paradox," which is reasonably well summarized at Wikipedia: "[W]ithin a given country people with higher incomes are more likely to report being happy. However, in international comparisons, the average reported level of happiness does not vary much with national income per person, at least for countries with income sufficient to meet basic needs."
So rich people in a society say that they're happier than poor people, but when you compare countries, richer countries aren't any happier than poorer countries. [This isn't exactly right: you have to take time into account, because rising income does make people happier, but over time it reaches a point where it doesn't. See the Update below.]
The Earth Institute at Columbia University has released the first-ever World Happiness Report, which not surprisingly cites the work of a Los Angeles economist whose pioneering research into...yes, happiness! is gaining increasingly currency. Richard Easterlin is at the University of Southern California and is responsible for identifying the "Easterlin Paradox" (that's him, in a video produced by the very fine economics writer Olf Storbeck). Here's a good definition of what it is — ironically from a Boston.com piece that talks about how the paradox is being challenged by a new generation of economists:
On the one hand, data [studied by Easterlin] showed that making more money makes you happier; at the same time, comparisons amongst nations revealed that richer nations weren't necessarily happier than poorer ones. This paradox, Easterlin suggested, showed that we derive happiness from wealth only in a relative way. From the point of view of happiness, it doesn't matter whether we have one car and an apartment, or two cars and a McMansion -- what really matters is what our neighbors have.
Facebook founder and CEO Mark Zuckerberg speaks during a news conference at Facebook headquarters on October 6, 2010 in Palo Alto, California.
OK, maybe not the worst thing. But according to Harvard Business Review blogger Daniel Gulati, not exactly a force for happiness:
When Facebook was founded in 2004, it began with a seemingly innocuous mission: to connect friends. Some seven years and 800 million users later, the social network has taken over most aspects of our personal and professional lives, and is fast becoming the dominant communication platform of the future.
But this new world of ubiquitous connections has a dark side. In my last post, I noted that Facebook and social media are major contributors to career anxiety. After seeing some of the comments and reactions to the post, it's clear that Facebook in particular takes it a step further: It's actually making us miserable.
He goes on. This is my favorite part:
[Facebook is] creating a den of comparison. Since our Facebook profiles are self-curated, users have a strong bias toward sharing positive milestones and avoid mentioning the more humdrum, negative parts of their lives. Accomplishments like, "Hey, I just got promoted!" or "Take a look at my new sports car," trump sharing the intricacies of our daily commute or a life-shattering divorce. This creates an online culture of competition and comparison. One interviewee even remarked, "I'm pretty competitive by nature, so when my close friends post good news, I always try and one-up them."