Showing posts with label Happiness. Show all posts
Showing posts with label Happiness. Show all posts

Monday, July 4, 2011

The alcohol consumption J-curve

People and governments love to simplify problems to a single issue - Speed kills, Helmets save lives, Stop the boats. It helps them appear to be ‘doing something’. But real life is not so simple.

Take alcohol. While heavy drinking has long been acknowledged as being socially disruptive, more recently, the fight against alcoholism has been partly driven by arguments around health impacts.  Yet their are both positve and negative health effects from alcohol, and the positive effects are usually overlooked.  The unintended consequences of policy are also rarely considered.

The alco-pops tax was one measure aimed at curbing binge drinking, but it was a fizzer. Sales of other alcoholic beverages increased significantly, offsetting much of the claimed benefits of the tax.

Additionally, no one considered that more expensive alcohol might encourage binge drinking at the expense of casual drinking. If your preferred alcohol is more expensive, there is less incentive to drink in a casual setting where you don’t end up drunk. Why spend the extra money on alcohol unless your intention is to get drunk?

It’s a thought that has crossed my mind when considering the drinking patterns around the world. Those countries with the most expensive alcohol, usually due to alcohol taxes, usually have the most extreme binge drinking culture (that's been my personal observation, and I have no hard evidence to back up the claim).

But alas, these considerations are a little too real for the average policy maker to consider.

The Australian government’s health message about alcohol follows the single issue simplification pattern precisely (their emphasis).

Due to the different ways that alcohol can affect people, there is no amount of alcohol that can be said to be safe for everyone. People choosing to drink must realise that there will always be some risk to their health and social well-being.

But alas, the evidence seems to strongly contradict this simplified message (although the alcohol consumption guidelines are a little more generous).

The overwhelming conclusion from large scale longitudinal studies is that moderate drinking improves longevity. The graph below illustrates.

Men who never drink are just as likely to live as long as men who average 4 drinks per day, with those who drink about one drink per day (or 7 per week) likely to live longest.

The results are partly attributed to the social interactions that are associated with alcohol consumption.

One important reason is that alcohol lubricates so many social interactions, and social interactions are vital for maintaining mental and physical health. (here)

Somewhat surprisingly there are no other plausible explanations at hand that I know of. The debate appears stuck on the ‘is this relationship real’ stage, without moving on to considering why it might be real.

So here is a suggestion.

Often our body has systems that work on a use-it-or-lose-it basis. We use muscles, they grow. We don’t, they atrophy. Our bodies have a built in system (ethanol metabolism) to break down alcohol. Perhaps the very act of digesting of excess alcohol keeps the system healthy for longer.

As my good friend Wikipedia says

If the body had no mechanism for catabolizing the alcohols, they would build up in the body and become toxic.

In any case, the health impacts of alcohol consumption are another example of how common understanding and resulting policy is often detached from the more rigorous academic research. It also highlights repeated failure of policy makers to consider the unintended consequences of well meaning policy.

HT: Eric Crampton at Offsetting Behaviour

Monday, June 6, 2011

Great Stagnation?

Tyler Cowen has an ebook that presents his hypothesis that America is undergoing a great stagnation. What he means is that teh rate technological change and economic growth has slowed since about 1973. You can get most of his message from the TEDx talk in the below video.

While Cowen acknowledges the great leaps in communication technology, I feel his presentation glosses over a lot of medical technology which is highly valuable and has continued to improve life expectancy.

He also glosses over a lot of other changes that people value but don't get recorded in the statistics (for example greater equality of genders and races or lower crime rates). The more effort society directs towards these social advances, the less effort it can direct towards technological marvels.

Overall it's a very interesting video for anyone curious about economics and modern history.

Sunday, May 29, 2011

Learning to judge risk

No, this is not a post on financial risk. It is about child development and learning to judge risks yourself (a hot topic in my household).

As an economist parent this article, and the comments that follow, is very interesting. It begins...

Play equipment designed by  "safety nazis " doesn't allow children to learn from risk-taking, an expert has warned.

More kids aged two to seven were getting injured in playgrounds because they didn't know how to take calculated risks.

While it may seem obvious, learning to take risks involves... taking risks! There is an old saying that epitomises this attitude – if you want to learn to swim, jump in the water.

But it seems that Councils are not going to replace their plastic low velocity slippery slides and bouncy foam ground covers with splintered old wooden climbing frames in hurry. The experts still haven’t grasped the implications of their research. They conclude with the following advice.

To improve playgrounds, Ms Walsh suggested longer and bigger slides built into embankments to eliminate falls.

Also, smooth boulders for balancing, shallow ponds for exploring and plenty of vegetation to provide nooks and crannies for children to crawl around.

But if children learn from risk taking, shouldn’t they build high fast slides, with no ground protection and sharp jagged boulders for balancing and deep ponds for exploring?

In any case, the finger pointing at engineers and playground designers was thoroughly dismissed in the comments, with molly-coddling litigious parents copping a bit of heat.

Wednesday, November 10, 2010

Sin tax myths – why smokers reduce health costs

Smokers have been the target of Australia's latest sin tax. Meanwhile, debate continues over using sin taxes to reduce consumption of 'unhealthy' foods such as soft drinks and confectionary.

(The word unhealthy is used quite loosely due to the fact that there is sufficient uncertainty about health – Are eggs good or bad these days? Margarine? – and because it is typically not the food itself, but the quantity consumed of a single food that is unhealthy.  Almost any food item consumed in excess will be unhealthy).

The primary arguments in favour of sin taxes are that
1.      the taxes reduce ‘harmful’ or ‘unhealthy’ consumption, and
2.      the taxes raised offset likely health costs such behaviours incur on others.

Unfortunately neither argument is compelling.

Monday, October 11, 2010

WEIRD people: Western, Educated, Industrialised, Rich, Democratic... and unlike anyone else on the planet

The Ultimatum Game works like this: You are given $100 and asked to share it with someone else. You can offer that person any amount and if he accepts the offer, you each get to keep your share. If he rejects your offer, you both walk away empty-handed.

How much would you offer? If it's close to half the loot, you're a typical North American. Studies show educated Americans will make an average offer of $48, whether in the interest of fairness or in the knowledge that too low an offer to their counterpart could be rejected as unfair. If you're on the other side of the table, you're likely to reject offers right up to $40.

It seems most of humanity would play the game differently. Joseph Henrich of the University of British Columbia took the Ultimatum Game into the Peruvian Amazon as part of his work on understanding human co-operation in the mid-1990s and found that the Machiguenga considered the idea of offering half your money downright weird — and rejecting an insultingly low offer even weirder.

"I was inclined to believe that rejection in the Ultimatum Game would be widespread. With the Machiguenga, they felt rejecting was absurd, which is really what economists think about rejection," Dr. Henrich says. "It's completely irrational to turn down free money. Why would you do that?"
(here)

A recent paper by Dr Henrich and colleagues from the University of British Columbia investigates the psychological differences between WEIRD societies and other societies. In a deep examination of the literature, Henrich shows that while many basic similarities remain common to Homo sapiens, cultural factors play a large role in determining many psychological dispositions. Such differences occur when examining fairness, individualism and cooperation.

For me one standout finding was that the income maximising offer for the ultimatum game (discussed in the introductory quote) was a mere 10% of the total sum for most cultures in the review, while in typical WEIRD cultures a 50% offer was income maximising (see graph below).


So what environmental factors contribute to the difference?

Thursday, June 24, 2010

Is Australia the best place to raise children?

This HSBC report ranks Australia as the best place to raise children for expats. IN fact, the media release suggest that the Expatriate Survey reveals the expats ‘say Australia is the best place in the world to raise children’. What it doesn’t do is justify that claim.

The report is based on a sample of 30 respondents from each country and they are asked to compare the various factors about raising children, such as child care costs, amount of junk food eaten, and time spent playing outdoors, with what occurred in their home country.

This may be interesting, but it is no way to rank a country’s performance. Without knowing the country of origin of the expats it is impossible to make a controlled comparison. For example, if the majority of expats in the sample living in Australia are from the UK, and the majority of expats living in the US are from Australia, we get a nonsense conclusion that Australia is the best country (because the difference between the UK and Australia is highest), even if the US is ranked in preference to Australia.

The rankings are the result of the difference between the country of origin and the new country without knowing the country of origin. The way to be highest ranked is to have the most expats from much poorer countries so that the positive change experienced is greatest.

Don’t misunderstand me. Australia probably is one of the better countries to raise children and could easily be the ‘best’ out of the comparison countries (UK, US, Singapore, UAE, Hong Kong). But this report is a classic example of how conclusions do not match the facts presented.

You don’t have to look far to find other cross-country comparisons of family well-being with utterly unsurprising results.

Monday, March 29, 2010

Is it all about GDP and growth?

(Guest post from Christian)

So if you believe the numbers, in the recent downturn, Australia managed to avoid 2 consecutive quarters of negative GDP growth and therefore had no recession.  This is an often proudly quoted fact by various Australian politicians and economists as a sign of the strength and resilience of Australia's economy and its wise management.  But what exactly does it all mean for the people of Australia?

Thursday, March 25, 2010

Friday quick links

1. Most findings of statistical research are false, and can be easily demonstrated to be so.  If I haven't convinced you to scrutinise statistics carefully, then this may. Warning: the linked paper is a little nerdy and mathematical.

2. Is prescribing a placebo a good idea?

3. One laptop per child and a computer on every student's desk - some evidence that computers help children learn computer skills, but detract from their learning of other more basic skills such as maths and English. 

4. My interest rate bet looks shaky - straight from the horse's mouth.

5. Moral self-licensing is when doing something good in one part of your life helps you justify doing something bad in another part.  This 'green' consumer experiment is a classic - ..green shoppers, however, earned on average 36¢ more, showing that they had lied to boost their income.

I must say that in moments of raw self-reflection I can see myself issuing a subconscious (sometimes conscious) moral licence.  'I've been good for a while, now I can justifiably do something bad" 

Maybe it has something to do with our upbringing.  I know that I often reward my son with otherwise 'bad' foods (he loves Jatz crackers) when he has behaved well.  It would be nice to conduct a cross-cultural comparison on this topic. 

It is also a example of actively reverting to the mean.  People think they are at the extremes of socially normal behaviour, so they do something that is at the other end of the spectrum to keep themselves in line with others.

Thursday, January 7, 2010

Are economists cheapskates: A case study



Lately, economists have been copping it from all angles.  They have been widely acknowledged as cheapskates, following this Wall Street Journal article.


My personal view is that economists are either; (a) more aware of the satisfaction they derive from various goods, services and activities (they know their utility), or (b) studying economics makes us more aware of which choices provide more satisfaction.


I tend to agree with this point about economists, and myself in particular (from here):
They are cheap in the sense that they need to be convinced of an item's value—and be convinced of the fact that there is no cheaper way of getting that item—before paying up. They hate being wasteful, and they take a cold, scientific approach to maximizing efficiency.


Sunday, January 3, 2010

Economics of work and leisure


Recently, I cut back work to 4 days a week with a surprising result. Rather than feeling like I am enduring marginally less of a bad thing, I am actually finding work more challenging and interesting – even though I am surrounded by the same public sector circus.

I feel like a 20% cut in work has resulted in an 80% improvement in my work satisfaction, rather than merely a 20% boost.

As an economist I really shouldn’t be surprised. Economic theory suggests an optimal work time – there are decreasing marginal benefits to work (in terms of pay), and increasing marginal costs (in terms of time, level of stress, level of frustration etc).

But this experience (and the popularity of this television show) has got me thinking about how the wellbeing of society at large can be improved by working less.

Wednesday, September 23, 2009

Those crazy French

The French have a reputation for pursuing the art of living. An appreciation of the finer things in life is a typically French quality. Their government reflects that pursuit back to the people through policies that reduce the hours of work of full time jobs, and that enable plentiful holidays. Their President, Nicolas Sarkosy, percieved as womaniser and playboy by some, embodies the French passion for life.

Sarkosy is now considering redirecting his government to use measures of happiness as a benchmark for progress; much like the quirky Kingdom of Bhutan, whose King Jigme Singye Wangchuck introduced Gross National Happiness as a measure of Bhutans progress in the 1970s.

It makes me wonder how subjective these measures might be, and how they will deal with the problem encountered by economists studying happiness - that after a shock to peoples happiness (death in the family, loss of job etc.), they return back to their equilibrium state rather quickly.  As a society, does this mean that this measure may lose validity, as the population has an equilibrium level of happiness that is not determined by external factors?  Poor government decisions would quickly drop from the radar as people returned to their previous happiness level. 

I can answer that one myself - no.  Because the measures being discussed are simply subjective weighted averages of external measures, such as air quality, income inequality etc.  The happiness measure therefore faces the problem of reconciling these subject external measurements with peoples actual self reported happiness.

Another interesting problem facing happiness researchers is that they can find very counterintuitive results.  For example, a new job actually decreases happiness, rather than increases it as would be expected.  An of course there is the Easterlin Paradox, which suggests that wealth is not an important factor in happiness.

But, in the end, what gets measured get managed.  If we as a society strive for progress of a kind that reflect our values of fairness, equality and our environmental concern, then maybe Gross Domestic Happiness is the tool for the job.  Maybe, it's simple another example of politicians playing politics.

Wednesday, April 8, 2009

Happiness, facebook style

Although spiritual leaders would suggest that happiness comes from within, recent research is suggesting it may also come from without.

You know the feeling, when someone laughs uncontrollably, you just start laughing as well for no reason – simply because they are laughing. Well this type of reaction is known as ‘emotional contagion’ and may describe why some groups of people always seem to throw a great party while others seem to be able to spoil the mood every time. A group of dominant and happy people can actually make others in the room happier.

Thinking of friends of mine I know there are some who are constantly happy, and probably part of bond between us is the mutual benefits of happy emotional contagion. And of course, this is likely to result in a feedback loop where one happy person makes others happy, and others who are now happy make the original superstar even happier.

Just throwing it out there, it probably happens in reverse as well. Unhappiness rubs off too. Maybe try whistling in the streets and see if you can rub off some happiness.

Wednesday, July 16, 2008

What does the economy produce? Hunger, humans or happiness?

It occurred to me recently that the economic system does not really produce anything. From our individual perspective it appears that many goods and services are produced... but what then? Adam Smith famously said that 'consumption is the sole end and purpose of all production', so everything we produce is subsequently consumed, leaving us with...?

We might think that this makes no sense. We produce goods to consume them - that is the purpose and the point. But what happens then? We consume goods and services and then we supply our labour to produce more goods and services, which are ultimately consumed and so one and so forth.

The economist would say that we produce utility. That is, some kind of happiness or satisfaction in each of us from the act of consumption. But much research suggests that happiness is determined internally once some basic human needs are met. So if all this production and consumption is not producing happiness, what is it producing?

From a physical perspective, some ecological economists have suggested that all the functions within an economy are interdependent. We think the production as a one-way street, but the consumption of food, housing and entertainment is necessary for the supply of labour, which goes back into production. It could be imagined that there is no real production in the economy. It is simply a system that enables humans to fulfil their basic biological desire to reproduce and support a growing population. We could then say the economy produces people, but that again would be arbitrarily confining the system, since as suggested earlier, people are a functional part of the whole.

Maybe this is a strange way to view the world. A system without purpose that produces nothing. But in fact, Darwin would suggest that is a good way to describe it. That is how he described biological systems - a system based on variation, inheritance and selection, with no forethought or purpose. We are just animals after all.

Anyway, for those out there who like to blame the political, economic or banking system for the world's ills, and think there must be some alternative, relax. There isn't. Many of the world's problems, from poverty and human rights issues, to environmental issues stem not from our institutional systems, but from greater biological evolutionary systems that blindly created humanity in the first place. Any political or economic system will suffer the same fate.

So please relax and enjoy yourself - because happiness comes from within.