The economics of happiness


The economics of happiness
By Zan Azlee

Here’s an economic formula or algorithm for you to ponder on:


Discovered by the Nobel prize-winning economists Gary Becker and Luis Rayo from the University of Chicago, it proves that humans can never make decisions that lead to happiness.

Here’s what the formula means:

Happiness = your success minus your expectations = your perceived social status. In Charles Montgomery’s book ‘Happy City’, he explains that people’s happiness is never constant and is constantly moving around. You and I will always make comparisons between what we have now to what we used to have in the past and what we potentially can have in the future. What that means is that if I buy a house now, I would compare it to the small apartment I had before, and this would cause me to be a very happy person. But then, my happiness level would change because I would be thinking that it would be just that much better to have a better and bigger house in the future.I would constantly need to get a bigger and better house in order to maintain and satisfy my ever-evolving standard of happiness. My thirst would never be quenched.

Some people might argue that this is what makes us continue to strive to improve ourselves and make our lives better. It’s what makes us move up in society. But is moving up in society this way really the key to happiness? Well, according to Becker and Rayo’s formula, it isn’t. We are just engineered to be constantly dissatisfied. In prehistoric times, that instinct is what kept humans alive. They had to hunt and gather food and the natural behaviour to always want more was a necessity to survive. But in a society that we live in now, our natural instincts as people is just going to cause us heartache and disappointment for the rest of our lives. [Click to read the full article at KopitiamEkonomi.Com]

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