Confessions of a Supply-Side Liberal

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My Experiences with Gary Becker


In my life, I crossed paths with Gary Becker in a significant way twice. Once was the Fall of 1986, when I was on the job market. Gary invited me to come to Chicago to present my paper “Making Sense of Two-Sided Altruism”—a paper Robert Barro arranged to have published in a Carnegie-Rochester volume not long after. At lunch with Gary and other Chicago economists, I was impressed with how seriously they took economics as the key to understanding everything. I am glad I got to see that. 

The second time I crossed paths with Gary was as someone who does research on the economics of happiness. In two papers,

  • Rayo, Luis, and Gary Becker. 2007. "Evolutionary Efficiency and Happiness,"  Journal of Political Economy, 115:2, pp. 302-337 
  • Becker, Gary S., and Luis Rayo. 2008. “Comment on ‘Economic growth and subjective wellbeing: Reassessing the Easterlin Paradox’ by Betsey Stevenson and Justin Wolfers.” Brookings Papers on Economic Activity, Spring: 88-95

Gary and his coauthor Luis Rayo took a view of happiness very close to my own, in the paper “Utility and Happiness,” coauthored with Bob Willis, and so close in time to Bob Willis’s and my work that it took an uncomfortable, but ultimately gracious email exchange with Gary and Luis to come to agreement on Bob’s and my priority. The two key ideas for the economics of happiness that Gary and Luis and Bob and I agree on are 

  1. The Price Theory of Happiness: Felt happiness, as measured in surveys, is only one of the many things that people care about. There are many other arguments in the utility function. Thus, the happiness studied in the economic of happiness is not the same thing as utility. In particular, people will trade off happiness for other things they want.
  2. The Elation Theory of Happiness: Here there are differences in detail between the two theories. Bob Willis’s and mine emphasizes that on top of longer lasting and routine influences on happiness, there is an impulse response of happiness to good news and bad news, where by “news” we mean a rational expectations innovation to lifetime utility.  

A large share of my research effort in the last few years has been working with coauthors—of whom Dan Benjamin and Ori Heffetz deserve special note—to back up the price theory of happiness and the elation theory of happiness. Below are our papers published so far (all of the ones below are in the American Economic Review). So far, they are all about the price theory of happiness.

We have been glad to have Gary Becker and Luis Rayo fighting with us for this new view of happiness.   

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9 Plays
Justin Wolfers, Matthew Adler and Ori Heffetz
Round Table on Happiness

image source

This is the audio for a discussion about happiness by three of the best researchers and thinkers on happiness in the world: Justin Wolfers, Matthew Adler and my coauthor Ori Heffetz. (It was for a radio broadcast that never aired. Simon Tulett is the interviewer.) It makes a wonderful addition to my sub-blog on “Happiness.” Thanks to the participants for making this public—especially to Ori, who arranged to post it on his personal website.

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The “Wait But Why” Blog on Why Generation Y Yuppies are Unhappy


Here is a picture of Lucy, who appears in the post “Why Generation Y Yuppies are Unhappy” on the Wait But Why blog.

Noah Smith tweeted that the post "Why Generation Y Yuppies are Unhappy" on the Wait But Why blog sounded like the theory of happiness that Bob Willis and I have been putting forward. (On that theory, see my post "The Egocentric Illusion"—my riff on David Foster Wallace’s Kenyon College Commencement Address.)

After reading "Why Generation Y Yuppies are Unhappy," I tweeted 

Read this wonderful blog post about happiness before you bother with anything I have ever written:

As you can see in that twitter thread, I then begged the author to let me reprint that blog post here, and was delighted to get that permission. I think you will see why if you keep reading. I think this post applies to many more of us than only those of us in Generation Y. 


Say hi to Lucy. Lucy is part of Generation Y, the generation born between the late 1970s and the mid 1990s.  She’s also part of a yuppie culture that makes up a large portion of Gen Y.  

I have a term for yuppies in the Gen Y age group—I call them Gen Y Protagonists & Special Yuppies, or GYPSYs.  A GYPSY is a unique brand of yuppie, one who thinks they are the main character of a very special story.
So Lucy’s enjoying her GYPSY life, and she’s very pleased to be Lucy. Only issue is this one thing:
Lucy’s kind of unhappy.
To get to the bottom of why, we need to define what makes someone happy or unhappy in the first place.  It comes down to a simple formula:
It’s pretty straightforward—when the reality of someone’s life is better than they had expected, they’re happy.  When reality turns out to be worse than the expectations, they’re unhappy. 
To provide some context, let’s start by bringing Lucy’s parents into the discussion:


Lucy’s parents were born in the 50s—they’re Baby Boomers.  They were raised by Lucy’s grandparents, members of the G.I. Generation, or “the Greatest Generation,” who grew up during the Great Depression and fought in World War II, and were most definitely not GYPSYs.


Lucy’s Depression Era grandparents were obsessed with economic security and raised her parents to build practical, secure careers.  They wanted her parents’ careers to have greener grass than their own, and Lucy’s parents were brought up to envision a prosperous and stable career for themselves.  Something like this:


They were taught that there was nothing stopping them from getting to that lush, green lawn of a career, but that they’d need to put in years of hard work to make it happen. image
After graduating from being insufferable hippies, Lucy’s parents embarked on their careers.  As the 70s, 80s, and 90s rolled along, the world entered a time of unprecedented economic prosperity.  Lucy’s parents did even better than they expected to.  This left them feeling gratified and optimistic.
With a smoother, more positive life experience than that of their own parents, Lucy’s parents raised Lucy with a sense of optimism and unbounded possibility.  And they weren’t alone.  Baby Boomers all around the country and world told their Gen Y kids that they could be whatever they wanted to be, instilling the special protagonist identity deep within their psyches.
This left GYPSYs feeling tremendously hopeful about their careers, to the point where their parents’ goals of a green lawn of secure prosperity didn’t really do it for them.  A GYPSY-worthy lawn has flowers.
This leads to our first fact about GYPSYs:
GYPSYs Are Wildly Ambitious

The GYPSY needs a lot more from a career than a nice green lawn of prosperity and security.  The fact is, a green lawn isn’t quite exceptional or uniqueenough for a GYPSY.  Where the Baby Boomers wanted to live The American Dream, GYPSYs want to live Their Own Personal Dream.  
Cal Newport points out that “follow your passion” is a catchphrase that has only gotten going in the last 20 years, according to Google’s Ngram viewer, a tool that shows how prominently a given phrase appears in English print over any period of time.  The same Ngram viewer shows that the phrase “a secure career” has gone out of style, just as the phrase “a fulfilling career” has gotten hot.


To be clear, GYPSYs want economic prosperity just like their parents did—they just also want to be fulfilled by their career in a way their parents didn’t think about as much.  
But something else is happening too.  While the career goals of Gen Y as a whole have become much more particular and ambitious, Lucy has been given a second message throughout her childhood as well:
This would probably be a good time to bring in our second fact about GYPSYs:
GYPSYs Are Delusional
"Sure," Lucy has been taught, "everyone will go and get themselves some fulfilling career, but I am unusually wonderful and as such, my career and life path will stand out amongst the crowd.”  So on top of the generation as a whole having the bold goal of a flowery career lawn, each individual GYPSY thinks that he or she is destined for something even better—
A shiny unicorn on top of the flowery lawn.  


So why is this delusional?  Because this is what all GYPSYs think, which defies the definition of special:

spe-cial | ‘speSHel |
better, greater, or otherwise different from what is usual.

According to this definition, most people are not special—otherwise “special” wouldn’t mean anything.

Even right now, the GYPSYs reading this are thinking, “Good point…but I actually am one of the few special ones”—and this is the problem.
A second GYPSY delusion comes into play once the GYPSY enters the job market.  While Lucy’s parents’ expectation was that many years of hard work would eventually lead to a great career, Lucy considers a great career an obvious given for someone as exceptional as she, and for her it’s just a matter of time and choosing which way to go.  Her pre-workforce expectations look something like this:
Unfortunately, the funny thing about the world is that it turns out to not be that easy of a place, and the weird thing about careers is that they’re actually quite hard.  Great careers take years of blood, sweat and tears to build—even the ones with no flowers or unicorns on them—and even the most successful people are rarely doing anything that great in their early or mid-20s.  
But GYPSYs aren’t about to just accept that.  
Paul Harvey, a University of New Hampshire professor and GYPSY expert, has researched this, finding that Gen Y has ”unrealistic expectations and a strong resistance toward accepting negative feedback,” and “an inflated view of oneself.”  He says that “a great source of frustration for people with a strong sense of entitlement is unmet expectations. They often feel entitled to a level of respect and rewards that aren’t in line with their actual ability and effort levels, and so they might not get the level of respect and rewards they are expecting.”
For those hiring members of Gen Y, Harvey suggests asking the interview question, “Do you feel you are generally superior to your coworkers/classmates/etc., and if so, why?”  He says that “if the candidate answers yes to the first part but struggles with the ‘why,’ there may be an entitlement issue. This is because entitlement perceptions are often based on an unfounded sense of superiority and deservingness. They’ve been led to believe, perhaps through overzealous self-esteem building exercises in their youth, that they are somehow special but often lack any real justification for this belief.”
And since the real world has the nerve to consider merit a factor, a few years out of college Lucy finds herself here:
Lucy’s extreme ambition, coupled with the arrogance that comes along with being a bit deluded about one’s own self-worth, has left her with huge expectations for even the early years out of college.  And her reality pales in comparison to those expectations, leaving her “reality - expectations” happy score coming out at a negative.
And it gets even worse.  On top of all this, GYPSYs have an extra problem that applies to their whole generation:
GYPSYs Are Taunted
Sure, some people from Lucy’s parents’ high school or college classes ended up more successful than her parents did.  And while they may have heard about some of it from time to time through the grapevine, for the most part they didn’t really know what was going on in too many other peoples’ careers.
Lucy, on the other hand, finds herself constantly taunted by a modern phenomenon: Facebook Image Crafting.
Social media creates a world for Lucy where A) what everyone else is doing is very out in the open, B) most people present an inflated version of their own existence, and C) the people who chime in the most about their careers are usually those whose careers (or relationships) are going the best, while struggling people tend not to broadcast their situation.  This leaves Lucy feeling, incorrectly, like everyone else is doing really well, only adding to her misery:
So that’s why Lucy is unhappy, or at the least, feeling a bit frustrated and inadequate.  In fact, she’s probably started off her career perfectly well, but to her, it feels very disappointing. 
Here’s my advice for Lucy:
1) Stay wildly ambitious.  The current world is bubbling with opportunity for an ambitious person to find flowery, fulfilling success.  The specific direction may be unclear, but it’ll work itself out—just dive in somewhere.
2) Stop thinking that you’re special.  The fact is, right now, you’re not special.  You’re another completely inexperienced young person who doesn’t have all that much to offer yet.  You can become special by working really hard for a long time.  
3) Ignore everyone else. Other people’s grass seeming greener is no new concept, but in today’s image crafting world, other people’s grass looks like a glorious meadow. The truth is that everyone else is just as indecisive, self-doubting, and frustrated as you are, and if you just do your thing, you’ll never have any reason to envy others.

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How I Became Optimistic



For the most part, those around me tend to think of me as relatively cheerful and optimistic. I want to tell you the story of how that came to be.

For several years when I was a teenager, I felt that facing reality meant I mustn’t fool myself by being optimistic. Studiously avoiding optimism had the side-effect of making me less cheerful. But then I read the Maxwell Maltz’s book Psycho-Cybernetics. Maxwell made an argument that changed my life. He argues that visualizing positive outcomes is a way to be prepared in case something good happened and a way to instruct one’s subsconcious mind to strive for that outcome. In other words, visualizing a desired outcome is a way to tell one’s subconscious mind what its objective function should be.

To me this was like a bolt out of the blue. Visualizing a positive outcome was not a claim that that outcome would happen, it was simply presenting a certain image to one’s mind without any claim to inevitability, in a way meant to increase the probability that the positive image might be realized. Thus, it was possible to carefully maintain objectivity for analytical decision-making and evaluation purposes, while still gaining the psychological benefits of optimism.

Ever since the day that logic made its way into my brain, I have allowed myself to be relatively optimistic, in what I hope is a careful way, and I have been noticeably more cheerful than I was before.

For many of you, this book was before your time, but it was reasonably important in its day, and in its effect on later events. Below is what the Wikipedia article on Psycho-Cybernetics has to say:

Psycho-Cybernetics is a classic self-help book, written by Maxwell Maltz in 1960 and published by the non-profit Psycho-Cybernetics Foundation.[1] Motivational and self-help experts in personal development, including Zig ZiglarTony RobbinsBrian Tracy have based their techniques on Maxwell Maltz. Many of the psychological methods of training elite athletes are based on the concepts in Psycho-Cybernetics as well.[2] The book combines the cognitive behavioral technique of teaching an individual how to regulate self-concept developed by Prescott Lecky with the cybernetics of Norbert Wiener and John von Neumann. The book defines the mind-body connection as the core in succeeding in attaining personal goals.[3]

Maltz found that his plastic surgery patients often had expectations that were not satisfied by the surgery, so he pursued a means of helping them set the goal of a positive outcome throughvisualization of that positive outcome.[3] Maltz became interested in why setting goals works. He learned that the power of self-affirmation and mental visualisation techniques used the connection between the mind and the body. He specified techniques to develop a positive inner goal as a means of developing a positive outer goal. This concentration on inner attitudes is essential to his approach, as a person’s outer success can never rise above the one visualized internally.

I can’t guarantee that Zig Ziglar, Tony Robbins and Brian Tracy maintain the same distinction between analytical realism and mental-imagery optimism that I try to, but their embrace of Psycho-Cybernetics indicates some of the reach it has had.  

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Self-Control as Inaction


Wu-wei: action through inaction

The image of self-control, both in popular culture and in economics, is of a kind of action. But psychologists Justin Hepler and Dolores Albarracín report that priming people with extraneous inaction words helped them resist temptation, while extraneous action words made it harder for them to resist temptation. (See the news article by Rick Nauert,  "Is Unconscious Self-Control Possible?") This sounds like Taoist wisdom to me: the key Taoist concept of wu-wei is "action through inaction."   

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What Would Economic Growth Look Like If We Properly Valued the Web?


I love Jeremy Warner’s essay "The UK internet boom that blows apart economic gloom" in the Telegraph. Jeremy makes several important points. One is that accounting for intangible investment, as the latest US GDP revisions do, can affect GDP figures. Here is a deeper issue Jeremy raises:

But even if these changes were to be incorporated, it still wouldn’t do justice to the growth in the digital economy. This is because much internet activity is free, and therefore immeasurable.

Take the traditional music industry, which used to involve, finding, recording and marketing new acts, and then cleaning up through copyrighted CD sales.

For decades, the model worked well — at least for the record producers and a small, elite of popular artists — and made a not insignificant contribution to GDP.

Then along came digital downloads, legal or otherwise. These have destroyed the old music company stranglehold on distribution, and in so doing made previously quite pricey music either far less expensive or completely free.

The pound value of music consumption has declined, and with it the music industry’s contribution to GDP, but the volume of music consumption has risen exponentially.

Much the same thing can be said about newspapers. The traditional business model has been badly undermined by the internet, but news demand and consumption has never been higher. If only we could persuade the blighters to pay, our industry would again be booming….

Prof Brynjolfsson believes that the correct way to measure all this… is via the time people spend immersed in it.

I know Erik Brynjolfsson from his Twitter feed as an excellent commentator on the digital economy.

The growing importance of free goods is one of the many reasons we need to go beyond GDP in accounting for well-being. Looking at the amount of time people spend online to infer value makes a lot of sense. But there are also more radical ways to go beyond GDP, as discussed in "Ori Heffetz: Quantifying Happiness" and "Judging the Nations: Wealth and Happiness are Not Enough." 

For the richest countries, at the technological frontier, human progress has shifted more and more into the realm of intangibles. Services are less tangible than goods; online activities are less tangible than face-to-face services; happiness, job satisfaction and meaning are less tangible than time spent hanging out in cyberspace. If we don’t develop good ways to account for the increasingly intangible dimensions of human progress, we will miss the main story going forward.  

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Ori Heffetz: Quantifying Happiness


Link to the article on the Johnson Business School website at Cornell

Ori Heffetz is now my coauthor many times over. There is a bio of him at the link. Here is his guest post on some of our joint work on the economics of happiness. Ori asks

Should governments monitor citizens’ happiness and use that data to inform policy? Many say yes; the question is how.


Most of our students at Johnson may be too young to remember, but in 1988, for the first time in history, an a cappella song made it to the #1 spot on the Billboard Hot 100 chart. Many of our alumni however won’t forget the huge success of Bobby McFerrin’s “Don’t Worry, Be Happy.” The artist’s unparalleled singing abilities aside, the song became an instant hit much thanks to its simple message that immediately resonated with everybody. After all, nobody wants to worry, and everybody wants to be happy. 

But if everybody wants to be happy, shouldn’t governments be constantly monitoring the public’s level of happiness, assessing how different policies affect it, and perhaps even explicitly designing policies to improve national happiness (and reduce national worry)? Wouldn’t it make sense to add official happiness measures to the battery of indicators governments already closely track and tie policy to — such as GDP, the rate of unemployment, and the rate of inflation? 

Researchers increasingly think so. Some advocate conducting nation-wide “happiness” surveys (or “subjective well-being” (SWB) surveys, to use the academic term), and using the responses to construct indicators that would be tracked alongside GDP-like measures. Although these proposals are controversial among economists, policymakers have begun to embrace them. In the past two years alone, for example, the U.S. National Academy of Sciences’ Committee on National Statistics convened a series of meetings of a “Panel on Measuring Subjective Well-Being in a Policy-Relevant Framework”; the OECD, as part of its Better Life Initiative, has been holding conferences on “Measuring Well-Being for Development and Policy Making”; and the U.K. Office of National Statistics began including the following SWB questions in its Integrated Household Survey, a survey that reaches 200,000 Britons annually: 

Overall, how satisfied are you with your life nowadays?
Overall, how happy did you feel yesterday?
Overall, how anxious did you feel yesterday?
Overall, to what extent do you feel the things you do in your life are worthwhile?

These and other efforts follow the French government’s creation, in 2008, of the now-famous Stiglitz Commission — officially, the “Commission on the Measurement of Economic Performance and Social Progress”— whose members included a few Nobel laureates, and whose 2009 report recommends the collection and publication of SWB data by national statistical agencies. No wonder Gross National Happiness, a concept conceived in Bhutan in the 1970’s, is back in the headlines. Can a few simple questions on a national survey, such as the British (Fab) Four above, be the basis of a reliable indicator of national wellbeing? Will the Bank of England soon tie its monetary policy to the “rate of happiness” (or to the “rate of anxiety”), making central banks that still tie their policies to traditional indicators such as the rate of unemployment seem outdated? 

Not so fast. While demand for SWB indicators is clearly on the rise — witness Ben Bernanke’s discussion of “the economics of happiness” in several speeches in recent years — efforts to construct and apply survey-based well-being indicators are still in their infancy. Among the most urgent still-unresolved practical questions are: Which SWB questions should governments ask? And how should responses to different questions be weighted relative to each other? The four questions above, for example, ask about life satisfaction, happiness, anxiety, and life being worthwhile. But does the public consider these the only — or even the most — important dimensions of well-being? And even if it does, how would people feel about — and will they support — a government policy that increases, say, both happiness and anxiety at the same time? 

These are the questions that my colleagues — Dan Benjamin and Nichole Szembrot here at Cornell, and Miles Kimball at the University of Michigan — and I address in our working paper, “Beyond Happiness and Satisfaction: Toward Well-Being Indices Based on Stated Preference” (2012). The idea behind our proposed method for answering the two questions — the “what to ask” question and the “how to weight different answers” question — is simple and democratic, and consists of two steps: first, gather a list, as long as you can, of potential SWB questions that governments could potentially include in their surveys; and second, let the public determine, through a special-purpose survey that we designed, the relative weights. 

To demonstrate our method, we followed these two steps. We began by compiling a list of 136 aspects of well-being, based on key factors proposed as important components of well-being in major works in philosophy, psychology, and economics. While far from exhaustive, our list represents, as far as we know, the most comprehensive compilation effort to date. It includes SWB measures widely used by economists (e.g., happiness and life satisfaction) as well as other measures, including those related to goals and achievements, freedoms, engagement, morality, self-expression, relationships, and the well-being of others. In addition, for comparison purposes, we included “objective” measures that are commonly used as indicators of well-being (e.g., GDP, unemployment, inflation). 

Next, we designed and conducted what economists call a stated preference (SP) survey to estimate the relative marginal utility of these 136 aspects of well-being. In plain English, what that means is that we asked a few thousands of survey respondents to state their preference between aspects from our list (e.g., if you had to choose, would you prefer slightly more love in your life or slightly more sense of control over your life?). With enough such questions, we could estimate the relative weight our respondents put on each of these aspects of life. 

Among other things, we found that while commonly measured aspects of well-being such as happiness, life satisfaction, and health are indeed among those with the largest relative weight (or marginal utility), other aspects that are measured less commonly have relative marginal utilities that are at least as large. These include aspects related to family (well-being, happiness, and relationship quality); security (financial, physical, and with regard to life and the future in general); values (morality and meaning); and having options (freedom of choice, and resources). Using policy-choice questions in which respondents vote between two policies that differ in how they affect aspects of well-being for everyone in the nation — rather than state which of two options they prefer for themselves — we continued to find the patterns above and in addition found high marginal utilities for aspects related to political rights, morality of others, and compassion towards others, in particular the poor and others who struggle. We also explored differences across demographic-group and political-orientation subpopulations of our respondents. 

But these findings themselves are perhaps less important. After all, our sample was not representative, and we had to make practical compromises in our data collection and analysis that governments would not have to make. The main contribution of our work, we believe, lies in outlining a new method, and in demonstrating its feasibility. Our method for evaluating SWB questions and for determining their relative weight in a well-being index can now be discussed, criticized, and, as a result, improved on. The familiar conventional indicators such as GDP, inflation, and unemployment did not start in the refined state we know them today: they have been continually fine-tuned over many decades. We hope that our work will contribute to a similar process regarding a SWB-based index. 

Many practical obstacles still have to be overcome before standardized, systematic measurement and tracking of SWB for policymaking purposes becomes a reality. But if the endeavor is successful, then perhaps our children — who I doubt will have heard of Bobby McFerrin’s #1 hit - will at some point consider a DWBH index - “Don’t Worry Be Happy” index - as standard as GDP and other indicators.


Note: I (Miles) give my take on the same research in my column "Judging the Nations: Wealth and Happiness are Not Enough."

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Quartz #8—>Judging the Nations: Wealth and Happiness Are Not Enough.


Link to the Column on Quartz

Here is the full text of my 8th Quartz column, “Obama the Libertarian? Americans say they’d be happy if the government got out of their way,” now brought home to The title of this post is the original working title of the column. Below the text of the column itself, I have an important outtake from my original draft.  This column was first published on December 4, 2012. Links to all my other columns can be found here.

If you want to mirror the content of this post on another site, that is possible for a limited time if you read the legal notice at this link and include both a link to the original Quartz column and the following copyright notice:

© December 4, 2012: Miles Kimball, as first published on Quartz. Used by permission according to a temporary nonexclusive license expiring June 30, 2014. All rights reserved.


Four years from now—or 40—how should we evaluate Barack Obama’s presidency? This is not an easy question. For example, when things go badly (or well), a tricky aspect of this question is “To what extent is the president responsible for what happened?” Ruchir Sharma argues that in their judgment of the last four years, voters put the primary blame for our economic troubles on inevitable after-effects of the financial crisis that hit in 2008. Another tricky aspect of judging a presidency is deciding how to sum things up when a policy initiated by the president helps one group while hurting another. But the first question to ask four years from now, in 2016, will be “Are you better off than you were four years ago?”

It’s often assumed that in answering this question people are referring to their financial situation. But what if they took happiness into account as well? As Allison Steed points out in her Nov. 29 article in the Telegraph, “Here’s How Much You Need to Be ‘Happy’ in Different Countries,”  financial aspirations can differ a lot across countries. And money is clearly not the only thing that matters for happiness. A Pew Research Center Report on happiness around the world shows that while happiness goes up with per capita GDP, at similar middle-income levels, the Latin American countries do better than expected while Eastern European countries do worse than expected.

In two previous Quartz columns, I discussed evidence that happiness is not enough: people want to be rich, successful, happy and much more. In previous research my co-authors and I found that in both hypothetical situations and the real-world choices young doctors make about which residency to choose, happiness was very important, but so was money and prestige.  This would be paradoxical if each of the people we surveyed defined “happiness” as “whatever it is I want,” but in fact, people used the word “happiness” to mean “feeling happy.”

That people want more than money makes GDP an inadequate measure of well-being. That they want more than happiness makes happiness an inadequate measure of well-being. So it won’t work to simply replace GDP with Gross National Happiness as Richard Layard advocates in his book, Happiness. And looking at National Life Satisfaction has a similar problem.

So let’s get serious about what it means for an individual or a nation to be better off. Constructing a solid measure of national well-being requires answering the two questions “What do people want and how much do they want it?” So my coauthors Daniel Benjamin, Ori Heffetz, Nichole Szembrot and I set out to answer exactly those questions in our National Bureau of Economic Research Working Paper “Beyond Happiness and Life Satisfaction: Toward Well-Being Indices Based on Stated Preference.” We gave about 4,600 US adults hard choices to make in computer-generated scenarios where they had to identify both what people wanted for themselves and what they wanted for the nation as a whole. We didn’t want to prejudge, so we started with a list of 136 aspects of life that people might care about, drawing from a wide-ranging scientific and philosophical literature, as well as spirited discussions among the four of us.

The answers we found to “What do people want and how much do they want it?” were at once surprising and the height of common sense. I want to focus on the answers people gave for what they wanted for the nation as a whole, since that is primarily what a president should be judged on. One important finding is that, even across divisions of party, religion, age and sex, people by and large put the same things at the top of the list of what they want for the nation.  And the things they want for the nation as a whole are similar to the things they want for themselves.

Let me give my take on the top 25 things we found people want for the nation as a whole. Freedom comes first: freedom from injustice, corruption, emotional abuse and abuse of power; freedom of speech and political participation, freedom to pursue one’s dreams and the freedom of having choices. Besides freedom, people want for the nation goodness, truth, loyalty, respect and justice.

Only after freedom and goodness, do the “bread-and-butter” aspects of people lives start to come in. These bread-and-butter aspects are reflected in 11 of the top 25 aspects of life, including people’s health and freedom from pain, financial security, someone to turn to in time of need, emotional stability, a sense of security and peace, and activities to enjoy. Beyond freedom, goodness, and the practical, bread-and-butter aspects of people’s lives I just listed, people want meaning—the sense that one is making a difference in the world–for themselves and for others.

Freedom, goodness, truth, loyalty, respect, justice, bread-and-butter concerns, meaning: people’s hopes for our nation, and for themselves, extend to a lot more than money and happiness. I believe the breadth of what people want for the nation has implications for the policies our country should pursue, and how we should judge President Obama four years from now. In drawing out those implications, I will leave aside the bread-and-butter concerns, and concerns about “justice,” since I think our leaders understand those better than the other concerns.

One of the best ways to increase the freedom in the world is to allow more people to come to the United States to experience and tell of the freedom we have here, as I advocated in my Quartz column “Obama Could Really Help the US Economy by Pushing for More Legal Immigration.” But there is a lot to be done to preserve and bolster freedom in the US. Taxes represent a loss of freedom that should be mitigated in the kinds of ways I suggest in my post “No Tax Increase Without Recompense.” The conflict between employees’ freedom at work and employers’ freedom to lay down work requirements need to be fairly adjudicated, as discussed in my post “Jobs.” And every government regulation, in addition to whatever other costs and benefits it has, causes a loss of freedom from telling somebody what they must do.

When we do constrain freedom by regulation, it should be in service of something important, such as truth: people’s freedom from being lied to, deceived or betrayed. It is worth remembering that the standard results about the virtues of the free market all depend on deception being effectively neutralized–so there is no fundamental conflict between economic growth and laws that block corporate deception and throw scam artists in jail.  Enforcing the basic principle of telling the truth, like enforcing property rights, is an area where government is on the side of the angels.

Meaning, goodness, loyalty and respect are the trickiest for public policy to foster. As a social scientist who does research supported by government grants, I would like to think that there is some sense of meaning for all of us in humanity’s efforts at scientific research, such as medical research and the kind of research to slow global warming advocated by Noah Smith in his Atlantic column “The End of Global Warming: How to Save the Earth in 2 Easy Steps.” But I think a big part of what government needs to do to foster meaning, goodness, loyalty and respect is to stay out of the way. In this regard, I am worried about recent discussion of limiting the charitable deduction. My proposal for a system of “public contributions” is a way to reform and refocus the purpose of the charitable deduction instead, in order to reduce the government deficit, and reduce the footprint of the government, without depriving people of help they need.

From doing this research, I am left with the overwhelming impression that—even in the realm of intangibles—what people hope for and wish for is not one thing, but many things. Our desires are boundless. And that is how it should be. As Robert Browning wrote, ”Ah, but a man’s reach should exceed his grasp, Or what’s a heaven for?”


In early drafts, I related what I say in the Quartz column to Jonathan Haidt’s six moral tastes in his book The Righteous Mind: Why Good People Are Divided by Politics and ReligionHere is a New York Times book review by William Saletan, and here is a good passage from Jonathan Haidt summarizing his theory, chosen by Bill Vallicella, in Bill’s post “Jonathan Haidt on Why Working Class People Vote Conservative.” 

There is a key chunk of text making the link to Jonathan Haidt’s theory that was appropriately cut for being too wonkish, but that I think you might find valuable

  1. for making that connection and 
  2. for more carefully stating the key findings about people’s preferences in hypothetical policy choices from my paper with Daniel Benjamin, Ori Heffetz and Nichole Szembrot

Here it is: 

The most important boon people want for the nation as a whole isfreedom. In the words we used for the choices we gave them, the #1, #2, #10, #13, #18 and #23 things people want for the nation are

  • freedom from injustice, corruption, and abuse of power in your nation
  • people having many options and possibilities in their lives and the freedom to choose among them;
  • freedom of speech and people’s ability to take part in the political process and community life;
  • the amount of freedom in society;
  • people’s ability to dream and pursue their dreams; and
  • people’s freedom from emotional abuse or harassment.

The next most important boons people want for the nation aregoodness, truth, loyalty, respect and justice. On our list, the #3, #6, #8, #17, #19 and #21 most highly-valued aspects of the good society are

  • people being good, moral people and living according to their personal values;
  • people’s freedom from being lied to, deceived or betrayed
  • the morality, ethics, and goodness of other people in your nation;and
  • people having people around them who think well of them and treat them with respect
  • the quality of people’s family relationships
  • your nation being a just society.

The exact picture of “goodness” and “justice” might differ from one person to the next, but it is clear that they represent more than just money and happiness.  University of Virginia psychologist Jonathan Haidt,  in his brilliant book The Righteous Mind: Why Good People Are Divided by Politics and Religion argues that morality comes in six flavors (“The righteous mind is like a tongue with six tastes.”):

  1. liberty vs. oppression,
  2. fairness vs, cheating,
  3. sanctity vs. degradation,
  4. loyalty vs. betrayal,
  5. authority vs subversion, and 
  6. care vs. harm.

The first five of Haidt’s flavors of morality are well represented above.  The fourth flavor of morality, care vs. harm, is the one many authors focus on, to the exclusion of the others. It is the bread and butter aspects of people’s lives. In our findings, care vs. harm is reflected in 11 of the top 25 (numbers 4, 7, 9, 11, 12, 13, 16, 18, 22, 24, 25), including “the overall well-being of people and their families” in your nation, people’s health, financial security, and freedom from pain; “people having people they can turn to in time of need” and a “sense of security about life and the future in general” and balance, as reflected in the items “people’s mental health and emotional stability,” “how much people enjoy their lives” and “how peaceful, calm and harmonious people’s lives are.”

In addition to all of these, people want meaning, as reflected by #5 and #14 on our list: “people’s sense that they are making a difference, actively contributing to the well-being of other people, and making the world a better place, and “people’s sense that their lives are meaningful and have value.”  In addition to his discussion of key dimensions of morality, in The Righteous Mind: Why Good People Are Divided by Politics and ReligionJonathan Haidt emphasizes the importance of meaning—in particular, the importance of feeling one is a part of a larger whole. One of his central metaphors is “We are 90 percent chimp and 10 percent bee.” That is, Haidt believes that perhaps 90% of the time we are out for ourselves, however gently, but perhaps 10% of the time we are out for a higher cause (like the general good of everyone in our group) to the deepest level of our beings. A sense of “meaning” often comes from making that connection to something greater than ourselves.  

You can see my other posts on happiness in the happiness sub-blog linked at my sidebar, and here:

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Quartz #3—>Al Roth’s Nobel Prize is in Economics, but Doctors Can Thank Him, Too


Link to the Column on Quartz

Here is the full text of my 3d Quartz column, now brought home to It was first published on October 15, right after Al Roth’s Nobel Prize was announced. This column describes research Dan Benjamin, Ori Heffetz and Alex Rees-Jones were conducting about trade-offs young medical doctors make in their National Resident Matching Program choices, including tradeoffs between happiness and other goods. Our paper is now finished (and submitted to a professional journal) and is available on the Social Science Research Network:

Dan Benjamin, Ori Heffetz, Miles Kimball and Alex Rees-Jones: Can Marginal Rates of Substitution Be Inferred from Happiness Data? Evidence from Residency Choices

If you want to mirror the content of this post on another site, that is possible for a limited time if you read the legal notice at this link and include both a link to the original Quartz column and the following copyright notice:

© October 15, 2012: Miles Kimball, as first published on Quartz. Used by permission according to a temporary nonexclusive license expiring June 30, 2014. All rights reserved.

Links to all my other columns can be found here. 


Neither of this year’s recipients of the Nobel Prizes in Economics have degrees in economics, but they certainly have the respect of economists like me. I learned Lloyd Shapley’s principles of cooperative game theory in graduate school. They have stood the test of time. And Al Roth is a very big name in microeconomic theory, whom most economists thought would someday win a Nobel Prize. Roth has a PhD in operations research, Shapley in math.

I have reason to be personally grateful to Al Roth because his redesign of the National Resident Matching Program (NRMP) for medical doctors has provided a foundation for research my coauthors, Daniel Benjamin, Ori Heffetz, and Alex Rees-Jones (all three now at Cornell) and I are conducting. We want to know to what extent young doctors are pursuing happiness or pursuing prestige and fortune instead. For our research, it is important that Al Roth designed the NRMP in a way that encourages medical students to express their true preferences.

What we did was to run our own web survey of the young doctors who had just made their choices in the NRMP. We wanted to see how much they valued happiness compared to other concerns in a real-world situation. We are after the answers to questions such as this: are the future medical residents willing to sacrifice happiness for prestige? Will they sacrifice their own happiness to go to a city their romantic partners like better? If they sacrifice happiness during their residency, is it only in order to experience greater happiness later on in life, or are they willing to make a choice they think will lower their happiness throughout their lives in order to get something else they want? The NRMP provides an ideal testbed for these questions because it makes the future medical residents think hard about their choices and what those choices mean for their lives, and provides a clear deadline for that thinking. And Al Roth’s design means that the match program should be getting the medical residents to think about what they really want rather than about some way to game the system. In a fitting tribute to Al Roth’s new home at Stanford, my coauthors gave a preliminary report of our research at the Stanford Institute for Theoretical Economics this summer. We have more work to do to analyze the data, but we can already see that there are rich rewards to this effort, thanks in important part to Al Roth’s design.


Update: Thanks to Daniel Altman’s digging, Here is a little more detail from Al Roth his efforts with the National Resident Match Program and how it works:

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Quartz #2—>Does Ben Bernanke Want to Replace GDP with a Happiness Index?


Link to the Column on Quartz

Here is the full text of my 2d Quartz column, now brought home to This column was first published on October 8. Links to all my other columns can be found here.

If you want to mirror the content of this post on another site, that is possible for a limited time if you read the legal notice at this link and include both a link to the original Quartz column and the following copyright notice:

© October 8, 2012: Miles Kimball, as first published on Quartz. Used by permission according to a temporary nonexclusive license expiring June 30, 2014. All rights reserved.


As chairman of the Federal Reserve, it is Ben Bernanke’s job to devour data like the latest report on how more Americans have found jobs.  But he wants even more data. In a prerecorded talk for a conference this past summerBernanke said, ”…we should seek better and more-direct measurements of economic well-being, the ultimate objective of our policy decisions.”  He’s not talking about more accurate versions of regular economic indicators, though.

Rather, Bernanke suggests that survey measures of happiness and life satisfaction should take their place alongside GDP as measures of how a nation is doing. In doing so, he joined current British Prime Minister David Cameron, who said ”it’s time we focused not just on GDP but on GWB—general wellbeing” and former French Prime Minister Nicolas Sarkozy, who said he would ”fight to make all international organisations change their statistical systems by following the recommendations” of the Stiglitz report. He refers to Nobel Prize winning economist Joseph Stiglitz’s committee’s work proclaiming “the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being.” The emphasis is in the original.

In Sarkozy’s case, historian Brian Domitrovic opines that Sarkozy was just trying to divert attention from poor GDP statistics, saying “France has excellent reason to suppress GDP statistics. Since 1982, among developed nations, France has been a clear laggard in GDP growth.” He went on: “The oldest and most pathetic trick in the book when you lose a contest is to try to move the goal posts. GDP statistics of the past quarter century have shamed France but flattered the US, Britain and East Asia. Mr. Sarkozy’s gambit to paper over this real difference will be lucky to find any takers.” Domitrovic is pointing out the very real danger of the manipulation and politicization of national statistics when the right way to measure something like “well-being” is unclear.

How can we avoid the dangers of manipulation and politicization of new indicators of national well-being? Here is a simple answer: if we are going to use survey measures of well-being such as happiness and life satisfaction alongside well-seasoned measures such as GDP as ways to assess how well a nation is doing, we need to proceed in a careful, scientific way that can stand the test of time. For example, in my research with Dan Benjamin, Ori Heffetz and Alex Rees-Jones in the August American Economic Review, people say they are willing to sacrifice happiness for money if the price is right. Without understanding how much people want money and how much they want happiness, no one should pretend to know whether GDP or happiness is a better measure of a nation’s performance.

But it isn’t just happiness vs. money. Should we be measuring anxiety or measuring stress? How much weight should we put on being satisfied with life as opposed to happiness? Without good answers to these questions, it will all degenerate into political posturing and dueling statistics. But if we do it right, the ultimate prize will be a new way to judge whether the government is doing its job. And to me there is no question what the government’s job is. It is to smooth the way so people can get what they want and lead the kind of lives they want to lead—without deciding for them what they should want.

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