Do it for America

A couple of weeks ago, I was on Bloggingheads TV discussing Robert Frank's Luxury Fever hypothesis with Mark Kleiman. In brief, Robert Frank points to evidence that extra income doesn't make us happier. Instead, we are engaged in competition over positional goods that serve mostly to signal our wealth and taste to others--the $20,000 slate shower, the expensive car, etc. One can argue that higher taxes, by raising the cost of each extra hour spent working towards the acquisition of another positional good (and thereby encouraging people to consume some more hedonically beneficial leisure), actually make everyone better off.

Enter Daniel Kahneman, the Nobel prizewinning founder of behavioral economics--the very work from which Robert Frank draws his conclusions.

. . . recent findings from the Gallup World Poll raise doubts about the puzzle itself. The most dramatic result is that when the entire range of human living standards is considered, the effects of income on a measure of life satisfaction (the "ladder of life") are not small at all. We had thought income effects are small because we were looking within countries. The GDP differences between countries are enormous, and highly predictive of differences in life satisfaction. In a sample of over 130,000 people from 126 countries, the correlation between the life satisfaction of individuals and the GDP of the country in which they live was over .40 – an exceptionally high value in social science. Humans everywhere, from Norway to Sierra Leone, apparently evaluate their life by a common standard of material prosperity, which changes as GDP increases. The implied conclusion, that citizens of different countries do not adapt to their level of prosperity, flies against everything we thought we knew ten years ago. We have been wrong and now we know it. I suppose this means that there is a science of well-being, even if we are not doing it very well.

The positional competition may not be doing you any good directly, but if it raises national GDP, it will indirectly help you, and everyone else in the country. If you don't want to conspicuously consume just to aggrandize yourself, you should carefully consider whether you don't owe at least it to your neighbors to install the new granite countertops. Dulce et decorum est pro patria emere . . .

Comments

That should be "emere," I think. "Morior" is deponent but "emo" is not.

Posted by y81 | January 2, 2008 5:56 PM

Do I understand correctly that Kahneman is saying here -- subject to appropriate language regarding statistical significance -- "Income does not predict happiness as among citizens of the same country, but average GDP is predictive of happiness as among citizens of different countries?"

Posted by alkali | January 2, 2008 6:19 PM

This could have been in your "Masters of the Obvious" post.

"Newsflash: It's good to be wealthy."

Who would have guessed it?

Posted by rwe | January 2, 2008 7:01 PM

mmm, perhpas it's better to be wealthy than to be poor, but good is relative.

Posted by SwissArmyD | January 2, 2008 7:19 PM

Hoping you'll add a link to the Kahneman quote.

Posted by Mark Thoma | January 2, 2008 7:56 PM

This is a rather materialistic reading of things. Perhaps wealth is a side effect of other cultural characteristics which determine happiness?

I wouldn't live in a mansion in the ghetto, for fear of getting killed or robbed.

Posted by Ryan W. | January 2, 2008 8:01 PM

Given that we've increased our standard of living hugely in the last century, does this mean that pretty much everyone who lived before 1900 was desperately miserable?

I find that a little hard to believe. I also find it hard to believe that we're desperately miserable in relation to (if things go well), our descendants in a hundred years.

Posted by Tom West | January 2, 2008 10:29 PM

But before 1900, most people did live miserable lives, didn't they? Solitary, poor, nasty, brutish, and short? No worthwhile health care, never enough food, widespread illiteracy, long working hours, etc.

Posted by Tom T. | January 2, 2008 11:02 PM

Hey, so as a psych grad student with a profound love for Kahneman, I'd hope that you:

a) link to the original

and

b) explain why you think that his argument that income improves happiness along the bottom whatever percent of the world is poor means that the causal link is similarly strong among us at the upper 5% of the distribution. Ignoring the huge benefits of a economically stable country that provides services for its people with a broad revenue stream, why would you think that an extra 500$ a year matters for us westerners as much as it does for people from Egypt or Peru?

Maybe he explains this nuance in the original, but it seems an important issue given that you want to tie it to your argument with Kleiman. Kahneman's a tricky fellow...

Posted by Mike Yeomans | January 2, 2008 11:33 PM

Mark Thoma and others,

Here is a link:

Kahneman Changes His Mind

I haven't studied Kahnaman's work in any depth, but Id' like to. It's good that economics is starting to look beyond the simple homo economicus of neoclassical economics. But it seems to me that he should have been more skeptical of his "hedonic treadmill" from the start.

Why not ask people--"Would you be better off with another $10,000"? Most people would say yes, resoundingly. All, I'd guess, but a handful of religious ascetics. Our revealed preference is for more money. And that is strong reason to suppose that we are getting some additional satisfaction from increasing wealth.

It seems clear to me, both from introspection and general experience, that wealth offers positive (though decreasing) marginal benefits. I'm certainly happier when my invesments do well than when they do not. I think most people feel the same way.

Posted by rwe | January 2, 2008 11:42 PM

Everyone wants more money. The question is, what do they do with that money, and does it make them happier? A lot of work (Tim Wilson, Malcolm Gladwell) goes to show that asking people what they want is a bad way to predict what they actually want. Does an extra 1,000 a year go towards great times with friends, or does it go towards an extra 100 sq. ft. in their apartment that is easily adjusted to, and goes unused and unappreciated? The point is there's always a good way to spend extra money, but people are very good at finding other ways.

Posted by Mike Yeomans | January 3, 2008 12:26 AM

rwe-

with this: "It's good that economics is starting to look beyond the simple homo economicus of neoclassical economics."

What do you think Mises was doing in 'Human Action', published in 1949?

http://www.econlib.org/library/Mises/HmA/msHmA.html

Or, were you referring to your relief that the Keynesians, and their derivative(school) Economagicians, are finally wondering why their prescriptive equations are killing their patients?

Posted by Mark E Hoffer | January 3, 2008 1:04 AM

The positional goods concept makes much more sense for extroverts than it does for introverts. We still like money, and we typically don't care what other people think about our spending.

Posted by Sebastian holsclaw | January 3, 2008 1:34 AM

The moral of this lesson is that we should all be thankful for I-Bankers who earn a ton of money, but work 80 hour weeks and help make our economy so potent.

Posted by thehova | January 3, 2008 1:50 AM

This could have been in your "Masters of the Obvious" post.

"Newsflash: It's good to be wealthy."Who would have guessed it?

I'd agree, but social "scientists" have often claimed the opposite. To really do science, you have to test the obvious hypotheses, too.

Posted by markm | January 3, 2008 8:07 AM

Or, were you referring to your relief that the Keynesians, and their derivative(school) Economagicians, are finally wondering why their prescriptive equations are killing their patients?-MEH

Yes. I was actually thinking of Mises when I wrote the post above. Mises and many other economists, including Keynes, had a deeper understanding of man than the neoclassical economists. Only the neoclassical economists insisted on reducing men to mere calculating machines. As Milton Friedman once put it, many in economics departments now are not economists but "mathematicians trying to do economics." And they like the homo economicus because he fits neatly into their mathmatical models.

It is for that reason that I think there is some justice in the charge that modern mainstream economics is autistic.

Posted by rwe | January 3, 2008 8:17 AM

To really do science, you have to test the obvious hypotheses, too.-markm

Markm, in general I agree. But I sometimes wonder whether economists nowadays would believe that it's pleasant to be in bed with a woman unless they had 50 regressions to "prove" it.

We ought to use introspection, general experience and common sense as well as "scientific" surveys and formal regressions. After all, Adam Smith and David Ricardo accomplished a great deal without modern econometric techniques. So did Mises and Hayek.

Throughout the Cold War, Paul Samuelson was busy predicting robust growth for the Soviet Union while Hayek was predicitng its demise. Even in 1989 Samuelson wrote:

"The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive."

That analysis should go down as one of the worst ever made. Samuelson was far the better mathematician, but it's clear now that Hayek understood something fundamental about economics he didn't. And somehow Hayek arrived at his insights without using STATA.

Posted by rwe | January 3, 2008 8:36 AM

rwe,

Those guys, PAE, are on the right track. I was always thankful that TAMU had put its Dept. of Econ in their 'Liberal Arts' School. From there, its Dept. infested w/ Keynesians, nonetheless, it was easy to see, upon reflection, that Economics was the bridge between the 'Humanities' and 'Finance'.

Now, if we could cure the misuse of the term 'economic'...when, in the vast majority of cases, it is meant as 'financial', we'd stride even close to a better understanding of the World around us.

Though, with your seeing of this aspect: "many in economics departments now are not economists but "mathematicians trying to do economics."--MF, how can you get behind Mankiw's work?

Posted by MEH | January 3, 2008 8:42 AM

If we accept both of these studies' conclusions:
1. "extra" wealth doesn't increase happiness within a given society.
2. being in a more wealthy society does increase happiness.

then that would seem to refute most of the currently popular notions about income inequality. My read of this is that, once everyone has access to good water and enough food to eat and transportation and a job and shelter, they become moderately happy and are not really improved by turning that transportation into a Bentley and that food into foie gras.

To me that reads like an argument in favor of measuring the welfare of the poor in absolute terms (access to potable water, shelter, food, etc) rather than relative terms (what percentage of the Goldman Sachs CEO's compensation is their salary)

Posted by Geoff | January 3, 2008 10:13 AM

when the entire range of human living standards is considered, the effects of income on a measure of life satisfaction (the "ladder of life") are not small at all. -- Kahneman

The argument over increased working time vs. increased leisure time and happiness is one restricted to the advanced economies: North America, Europe, and East Asia. There is no meaningful comparison to be made between Americans and Somalis. Take another look at the correlation between satisfaction and national income within the advanced economies; also look at how that breaks down according to income level within each advanced economy; and then get back to us.

Posted by brooksfoe | January 3, 2008 10:57 AM

Mark, I think Mankiw is a reasonable, open-minded guy. He is probably still too wedded to the neo-clasical paradigm, but he tries to take the best insights from various different schools and traditions in economics.

Paul Krugman says just about everything more classically minded economists believe in is wrong. Robert Barro says, on the contrary, the Keynesians have little to contribute.
Greg Mankiw tries to incoroporate Keynes' insights into a largely classical framework.

Despite his Keynesian academic training, Mankiw generally appreciates the power of free enterprise to raise living standards. He wants lower marginal tax rates, less spending, low inflation, light regulation and free trade. In the great intellectual battle between Hayek on the one side and Keynes and the socialists on the other, Maniw comes down pretty consistently on Hayek's side... This might make you think a little more highly of Mankiw:

"I am confident that while I was a student at Princeton and MIT, I was assigned not a single article by an economist in the Austrian tradition. That judgment might well be unfair. Another prominent Austrian economist (besides Mises) is Friedrich Hayek, who won the Nobel prize in economics. Cognizant of my ignorance of his work, a few years ago I read (and assigned in a Harvard freshman seminar) his classic book The Road to Serfdom. I thought it was terrific."-Greg Mankiw

Posted by rwe | January 3, 2008 11:04 AM

Looking at the Angus Deaton study Kahneman appears to be riffing off - http://www.princeton.edu/~rpds/downloads/Deaton_Aging_and_wellbeing_around_the_world_Aug_07_ALL.pdf - it seems that in fact the Gallup Poll says the effects on satisfaction are at least as high between high-income countries as between high- and low-income ones.

On the other hand, weirdly, the poll finds that recent economic growth has a negative effect on happiness.

It is unclear how long it takes for the misery caused by increased wealth to wear off and reverse itself. There is no mechanism proposed for this effect. And since the US has had reasonably high growth rates consistently throughout the century, it is unclear at what point Americans who were becoming constantly less happy due to economic growth might have turned around and become more happy due to their higher income levels relative to others. Perhaps back in the 1700s, Americans were simply ecstatic, and the subsequent 250 years of economic growth have only moderately tamped down their enthusiasm. Or maybe the positive effect of having a higher income level than those in other countries is stronger than the negative effect of experiencing economic growth -- something like, "Well, I'm richer than I was last year, which sucks. But I'm a LOT richer than them Mexicans -- which rocks!"

I find these results somewhat confusing.

Posted by brooksfoe | January 3, 2008 11:37 AM

I would imagine that when asked the relative happiness question, middle-income Americans do not initially compare themselves to Somalis; they compare themselves to CEOs. In that respect, they see themselves as relatively poor despite their almost fantastic wealth compared to the average Somali.

I have a 10-year-old F-150 in my garage, and every sports game I watch on my 27-inch television is absolutely chock-a-block with commercials for Lexuses and Cadillacs and Nissan Rogues and shiny SUVs. There's no way in hell I can afford one of these 40k and up vehicles; how am I supposed to avoid feeling economically disadvantaged, when I am constantly bombarded with these images of "the good life" which I still cannot afford? And at 60k per year I'm theoretically better off than most Americans.

Posted by liberalrob | January 3, 2008 12:47 PM

liberalrob,

If it makes you feel any better, my experience is that most of the people driving those vehicles can't afford them either...

Posted by SG | January 3, 2008 1:26 PM

how am I supposed to avoid feeling economically disadvantaged...

I've never felt "economically disadvantaged" watching TV, even when making less than you on two salaries. Indeed, I'm not certain my range of emotions includes a spot for "economic disadvantage."

If seeing commercials affects you that much, you might want to invest some of your salary in psychotherapy to help you get over your apparent willingness to let TV control you.

Posted by Rob Lyman | January 3, 2008 1:32 PM

"I would imagine that when asked the relative happiness question, middle-income Americans do not initially compare themselves to Somalis; they compare themselves to CEOs. In that respect, they see themselves as relatively poor despite their almost fantastic wealth compared to the average Somali. I have a 10-year-old F-150 in my garage, and every sports game I watch on my 27-inch television is absolutely chock-a-block with commercials for Lexuses and Cadillacs and Nissan Rogues and shiny SUVs. There's no way in hell I can afford one of these 40k and up vehicles; how am I supposed to avoid feeling economically disadvantaged?"-libralarob

Who cares about malnourished Somalis or North Koreans? Liberalrob can't afford the Lexus he wants. What a tragedy.

Posted by rwe | January 3, 2008 2:07 PM

"And at 60k per year I'm theoretically better off than most Americans."

A single guy making that much money can afford a 40K car and big-screen TVs, it just depends on priorities. Many make other things a priority though (kids, house, savings etc.) so they don't spend the money. Since sports games attract a largely male audience a lot of these guys have the disposable income to blow it on an expensive car to impress the ladies.

Posted by JordanT | January 3, 2008 2:51 PM

Does an extra 1,000 a year go towards great times with friends, or does it go towards an extra 100 sq. ft. in their apartment that is easily adjusted to, and goes unused and unappreciated?

That's a very strange comment to make. Perhaps improvements in living quarters are not valuable to you because you have already found suitable quarters, and would receive no benefits from a different living space that would outweigh the costs of dislodging yourself from present circumstances. But that hardly applies to everybody.

A hundred square feet, incidentally, is the minimum standard layout for a residential bedroom. Whether as an additional room to be used, or merely additional floor space in an apartment with a comparable number of rooms as before, I daresay many people would find benefit in that. Especially if they have large numbers of friends that they like to invite over for social events.

Or maybe the new place is in a better neighborhood; has better retail nearby; has better furnishings and fixtures; is closer to work; is closer to grandma who needs to be looked after more than once a week; or...well, there can be any number of reasons.

Posted by anony-mouse | January 3, 2008 3:27 PM

Liberalrob: "And at 60k per year I'm theoretically better off than most Americans."

You're a smart guy, if you're only making 60k, it's because you choose to only make 60k. Do you think you could making 120k if you had made some differnt choices in life. I think we can assume yes.

Posted by Jmo | January 3, 2008 3:45 PM

Liberalrob: "And at 60k per year I'm theoretically better off than most Americans."

You're a smart guy, if you're only making 60k, it's because you choose to only make 60k. Do you think you could making 120k if you had made some different choices in life. I think we can assume yes.

Posted by Jmo | January 3, 2008 3:46 PM

rwe,

back to Mankiw, what about that piece, of his, that you recently linked to.."Economists are the new warrior-G-ds of Science and Physicists better watch out of the way"/"My = sign is bigger than yours"-type spiel..

Posted by MEH | January 3, 2008 4:17 PM

Shorter me: "here's my take on the Frank/Kahneman "revelation" that Americans don't feel happy despite having one of the highest standards of living on the planet."

Shorter rwe/Jmo/Rob Lyman: that liberalrob, what a whiner.

Thanks a lot for your insightful responses.

Posted by liberalrob | January 3, 2008 4:37 PM

So, I see a new causal question: do people whine because they are unhappy, or are they unhappy because they whine?

Or, on the other hand, is there a third factor, "whininess," which leads to both unhappiness and whining?

But in any case, if a major source of unhappiness in the US is that well-off people wish they could be even more well-off so as to have what they see in commercials, then there is no real problem worth trying to solve; only whiners who need to get a life.

Posted by Rob Lyman | January 3, 2008 4:48 PM

liberalrob,

Yeah, you kinda had to expect the petty "ooh poor you" comments, when you put "I make 60k" out there next to stuff about the world's poor. But the two studies, especially taken together, seem to directly refute the sort of "inequality driven dissatisfaction" that you refer to.

One study shows that you really wouldn't be happier if you actually got that Lexus, and the other study shows that you really would be less happy if you were living in Somalia. So you've already got all the material wealth you need for your happiness. Presumably the road from here on up is paved with positive thinking and good friends, or something of that sort.

Of course, that's assuming that both studies are actually correct.

Posted by Geoff | January 3, 2008 5:00 PM

I think one has to entertain the idea that - for some people - money will bring a deep and profound joy. For others, it won't really matter.

It may have to do with whatever gene controls an individuals competitiveness. Some people need to be the best, to score the most goals, to have the highest GPA, to make the most money, etc. Others could care less.

I don't think there is a universal recipe for happiness.

Posted by Jmo | January 3, 2008 5:46 PM

Rwe pretty much summed it up in his first comment.

Posted by Yancey Ward | January 3, 2008 7:12 PM

rwe -

That group (and you, it sounds like) are using 'autistic' as a slur, an insult, an attack. They never even bother to explain their use of the term, since apparently 'everyone knows' that autistics are messed up and shouldn't be allowed out around normal people.

People's brains work and are structured differently. I wouldn't be surprised to learn that more than half the Nobel prize winners in math and various sciences are fairly far out along the autism spectrum, so perhaps such brain structures shouldn't be banned completely from intellectual debate.

If you didn't mean to use 'autistic' as an attack and insult, and weren't saying that people with autism are defective and somehow bad, perhaps you could explain how your use of the term could be interpreted differently? The group you reference uses the term 'autistic' the way 12 year old bullies use the term 'retarded'.

Posted by Ann | January 3, 2008 7:12 PM

Ann, I seem to have upset you. So let me clarify. I didn't mean to denigrate the autistic. I didn't choose the term, a bunch of French students did. I'm sympathetic with some of their aims, but not their nomenclature. Okay?

And whatever their failings, some of their criticisms of modern mainstream economics are well worth listening to.

Posted by rwe | January 3, 2008 8:23 PM

rwe - I agree that they may have a worthwhile case to make, but (as you can tell) I deeply object to their attack on those that are autistic. Perhaps what bothers me most is that they don't try to justify it - they simply take it as common knowledge that autistic = bad.

Actually, though, in looking for some justification of the way that they use the term 'autistic', I haven't even been able to find much of a statement on these alternate forms of analysis that they're trying to promote, or how they propose to offer some alternate from of rigor. You say that you don't agree with their insults and name-calling, but what else is there to the group?

Posted by Ann | January 3, 2008 8:49 PM

Ann, you might want to look here:

http://www.paecon.net/

I believe that they chose the term to imply that mainstram economists like Samuelson suffer from something approaching a neurological disorder that stunts their understanding of society and social interaction. I'm not defending it, just explaining it. Actually, I know very little about autism, so I'm not the person to get into a detailed discussion of it with.

I don't agree with everything they write. The group is a motley collection of just about everyone in economics who disapproves of the mainstream in some way. So it attracts a lot of cranks, like the last remaining Marxists. It also tends a little left, though it includes some Austrian economists who are stalwart defenders of economic freedom.

But many of their criticisms of the profession are sound. When economists insist that the Nasdaq was rational at 5000, they start to look ridiculous, like the scientists of Swift's Laputa--bumbling dreamers who have lost nearly all contact with the ground below.

Posted by rwe | January 3, 2008 9:53 PM

I have a 10-year-old F-150 in my garage, and every sports game I watch on my 27-inch television is absolutely chock-a-block with commercials for Lexuses and Cadillacs and Nissan Rogues and shiny SUVs. There's no way in hell I can afford one of these 40k and up vehicles; how am I supposed to avoid feeling economically disadvantaged, when I am constantly bombarded with these images of "the good life" which I still cannot afford? And at 60k per year I'm theoretically better off than most Americans.

Well one suggestion comes to mind. For every minute you spend watching commercials, spend another minute looking at photos of slums in the third world and in history. Add to that photos of people tramping through mud and dead bodies in the Civil War, the Crimeran War, and WWI trenches. Bombard yourself with images of "the bad life", from which you have thankfully escaped.

I have just been reading a book about what the average Russian went through in WWII. I am feeling massively economically and politically advantaged, and am incredibly grateful to my ancestors for getting out of Europe when the getting was good. Your reference group is within your control.

Plus I'm learning a chunk of history too.

Posted by Tracy W | January 4, 2008 8:22 AM

"Your reference group is within your control."

What a great point, Tracy. I've often thought that whether people are happy or unhappy depends in large part on who they compare themselves too, and as you point out, that's a choice variable. "Count your blessings..."

Thanks for the link, rwe, but it still appears to me that the group is clear only on what they don't want, not on offering a viable alternative (as you said, a 'motley collection'). And none of that justifies their vicious attack on people whose brains are structured differently but who still have a lot to offer. I don't see why it's acceptable to anyone to use the term 'autistic' as an insult, and I hope you'll think twice about it in the future, even though it's nomenclature chosen by others. The fact that they use it as a slur doesn't mean that you have to.

Posted by Ann | January 4, 2008 9:38 AM

I suppose that instead of using my own experience as an example of the point I was trying to make, I should have postulated some nameless "average American." The rush to beat on crazy stupid whiny liberalrob totally overshadowed and obscured my actual argument.

Re-reading Megan's post for about the tenth time, it appears I misunderstood the conclusions of the reports she was citing. Now I'm just confused. On the one hand, we get "GDP differences between countries are enormous, and highly predictive of differences in life satisfaction." That tells me that people in high-GDP countries like the United States should be more satisfied with their lives than people in low-GDP countries; indeed, "the correlation between the life satisfaction of individuals and the GDP of the country in which they live was over .40 – an exceptionally high value in social science." Yet on the other hand, "[t]he implied conclusion, that citizens of different countries do not adapt to their level of prosperity" seems to me to be totally contradictory. If people's happiness goes up with GDP, how can they not be adapting to their new level of prosperity by being happier? It makes no sense.

I find myself having to question the study. At least in the case of the United States, with our "two Americas" and populist/progressive movements that seem to be gaining steam, it seems many Americans are not at all happy with their high-GDP nation. What constitutes "life satisfaction" in a high-GDP country may be different from what it means in a low-GDP country. Or is America just an outlier in the study, and countries with saner, more homogeneous citizenries better exhibit the correlation between GDP and "life happiness?"

Ah, who cares. Let's get back to telling me all the ways in which I'm a terrible person. That's a lot more fun.

Posted by liberalrob | January 4, 2008 12:20 PM

au·tism (ôtzm)
n.
A psychiatric disorder of childhood characterized by marked deficits in communication and social interaction, preoccupation with fantasy, language impairment, and abnormal behavior, such as repetitive acts and excessive attachment to certain objects. It is usually associated with intellectual impairment.

--------------------------------------------------------------------------------
Ann,

I'm sure we get your point. I highly doubt that rwe, or, even the pae group, was using the term as a slur. As a matter, I've never heard of it being used as a slur, but my experience isn't universal..I think, seeing the general definition above, you may be able to devine why pae is calling, currently, 'mainstream' Economics 'autistic'. Is it the best choice? Maybe not, though, try not to fall into this mode: ""Marx and Engels never tried to refute their opponents with argument. They insulted, ridiculed, derided, slandered, and traduced them, and in the use of these methods their followers are not less expert. Their polemic is directed never against the argument of the opponent, but always against his person."-LvM

Posted by MEH | January 4, 2008 12:22 PM

If people's happiness goes up with GDP, how can they not be adapting to their new level of prosperity by being happier?

By "adapting," the authors presumably mean "resetting their happiness to default levels" in the way that, say, a newly wealthy person might "adapt" to traveling first class by finding it the only acceptable way to travel, and coach class (which they had used in years past) simply insufferable and horrifying.

That is, Americans are happy because they are rich; they have not become so accustomed to wealth ("adapted") that they simply assume it to be the natural state of things and derive no psychic benefit from it.

BTW, I'd be perfectly happy to beat up on crazy stupid whiny "average American," too. I could afford a Lexus if I really wanted to, but I know it wouldn't make me happy, so why waste the money?

Posted by Rob Lyman | January 4, 2008 12:31 PM

I wonder if the results of this study might be accounted for by a correlation between relative income and international status?

As someone who has lived in E. Europe for a long period, I have noticed that national inferiority complexes can often develop around income levels that have nothing to do with consumption per se.

Posted by Gestalty | January 4, 2008 5:37 PM

Because of data like those you cite, I have said that that the happiness research is a flimsy foundation for Frank's social critique:
http://www.concurringopinions.com/archives/2007/07/how_not_to_argu.html

However, there are much firmer foundations, which I hope you will acknowledge:

http://www.concurringopinions.com/archives/2007/07/objective_harms.html

My sense is that a true test of a conservative econo-blogger's bona fides is their willingess to acknowledge those issues. Even Tyler Cowen will occasionally acknowledge the importance of those aspects of Frank's work.

Posted by Frank Pasquale | January 7, 2008 8:34 AM