StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

The Economics of Happiness - Essay Example

Cite this document
Summary
This essay "The Economics of Happiness" discusses the fact that money can buy happiness. According to previous surveys, human beings will prefer to use less effort in looking for money. They instead devote such time to more important issues like health and family life…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.5% of users find it useful
The Economics of Happiness
Read Text Preview

Extract of sample "The Economics of Happiness"

Question I disagree with the ment that money can buy happiness. According to previous surveys, human beings will prefer to use less effort in looking for money. They instead devote such time to more important issues like health and family life. I support this statement because you can not look for money when you are sick or you do not have peace at home. This is because efficiency reduces when faced with such problems. According to Easterlin R.A. (2004), happiness is low when self-reported health is poorer. Negative impact of poor health to happiness is partly due to loss of income but mainly it is caused by limit to one’s usual activities. This is a clear indicator that people are more concerned about health than money. Furthermore, close relationships built in marriages help to boost happiness and loss of ones partner leading to dissolution of relationships that have a negative effect on happiness. According to Adam Smith’s theory of moral sentiments, people limit their ability to achieve happiness when they dwell on acquiring material wealth. The discovery by economists that money can’t buy happiness is a justification for high taxes and more government spending. According to Lee .D.R (2005), pursuit of money is addictive and reduces the time available for friends, family and other activities that result in genuine happiness. In addition, human happiness comes only from avoiding dependence on others. This is brought about by striving for improvements and achievement obtained by overcoming the challenges faced. In conclusion, we can not just totally dispute the fact that money does not bring happiness. Money does bring happiness especially with an increase in the level of income (which is a sign of achievement) although the happiness brought by money is temporary. Question 2 It is very important for people to look for money because it increases their purchasing power .Money also enables one to be able to do what he so wishes, for instance, investment. Money can be obtained by earning as an income, borrowing and from savings. All these three methods of acquiring money have an opportunity cost (defined as the value of foregone opportunity).For instance the opportunity cost of earning income is loss of time for other activities like recreation. Money held as savings has the foregone opportunity of loss of profit for income generating activities in which the money could have been invested. Finally, the foregone opportunity of borrowing is the high interest rates although such borrowed money can be invested in more income generating activities in future. Therefore everyone strives to get money by whatever means considering the opportunity cost. The means of acquiring money whose opportunity cost is low is the best method chosen. Marginal utility of money is the extra satisfaction derived from an extra unit of money spent. Marginal utility of money is never constant because an extra unit of money given to a poor person will add much to his satisfaction than if the same coin was given to a rich person. This means that poorer people continue striving to obtain more money as compared to the rich because by doing so, their marginal utility increases. It therefore makes sense for people to pursue money especially when an increase in their money amounts will increase their utility. Production is the conversion of raw materials into more usable form. Money can not be considered as a factor of production but all the other factors are directly dependent on money. For instance without money wages cannot be paid, capital cannot be acquired and also the best entrepreneurial skills cannot be used in production. Therefore people should continue pursuing money because it can be invested in the production process and generate great returns in future. Question 3 Standard of living is described by both an increase in per capita income and an increase in the welfare of people. It is true that households demand money for transaction purposes which enables them to buy what they need thereby satisfying their needs. Satisfaction of needs can not be used as a measure of the standard of living of households because needs may be satisfied but when the living conditions (examples education, health care and access to social amenities) continue to be poor, then the standard of living continues to be poor. Therefore average income can not be used as a good measure of the standard of living of a country. According to the Killen Roos ecochart website, Standard of living can be measured using the following criteria: Per Capita income-This is obtained by dividing the total GNP by the total number of households. It shows the amount of income that is available for each household. This contributes to a decent living because people are able to obtain what they need. A higher per capita income will therefore indicate a high standard of living because individuals will be able to satisfy their needs because of the high income. Daily per capita caloric supply as a percentage of requirements-This measures whether people have enough to eat. It indicates the extent to which an individual takes in enough calories to be healthy. When people take in enough calories, they are healthy and their standard of living is increased. The human development index-this was devised by the United Nations in the 1990s and gives a worldwide perspective of how well people are living. It has several components first, the life expectancy, the education levels including enrolment rates and adult literacy rates. It therefore means that countries experiencing high a life expectancy that is high have high living standards.In addition high adult literacy rates and school enrolment rates is an indication of high standards of living. Social health index -This describes the social well being of a nation by using indicators. These indicators include first child poverty, health care coverage and high school completion. This is a measure that is common in the US for assessing the welfare of the different states. It therefore means that a state with low poverty levels, good healthcare coverage and high school completion is regarded as having high living standards. Infant mortality rates-This is the number of new born who die before one year in every 1000 children born. A country with high standards of living has a low mortality rate due to the good health care. The measurement of the standards of living therefore takes into account several criteria. This means that one indicator is not sufficient to be used for measurement of welfare. It is therefore important to incorporate all the above measures when evaluating people’s welfare. In conclusion, apart from having enough money to buy needs, human beings also require to satisfy their social needs in order to regard themselves as having high standards of living. References Easterlin, R.A. The Economics Of Happiness .2004.133 (2) 26-33. Retrieved April 17, 2010, from http://www-rcf.usc.edu/~easterl/papers/Happiness.pdf “How do we measure standard of living” The Ledger .2003. Retrieved April 17, 2010, from http://www.bos.frb.org/education/ledger/ledger03/winter/measure.html Lee, D.W. “Who Says Money Cannot Buy Happiness”. The Independent Review 5(3) 2005. Retrieved April 17, 2010, from http://www.independent.org/pdf/tir/tir_10_3_05_lee.pdf Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Economics Essay Example | Topics and Well Written Essays - 1000 words - 27”, n.d.)
Economics Essay Example | Topics and Well Written Essays - 1000 words - 27. Retrieved from https://studentshare.org/miscellaneous/1565357-economics
(Economics Essay Example | Topics and Well Written Essays - 1000 Words - 27)
Economics Essay Example | Topics and Well Written Essays - 1000 Words - 27. https://studentshare.org/miscellaneous/1565357-economics.
“Economics Essay Example | Topics and Well Written Essays - 1000 Words - 27”, n.d. https://studentshare.org/miscellaneous/1565357-economics.
  • Cited: 0 times

CHECK THESE SAMPLES OF The Economics of Happiness

Why is it that despite our affluence, happiness is so elusive in the industrialised world

A person may be economically successful but devoid of happiness.... Rationalization of events shields people from psychological pain and hence avail some form of happiness.... This is a subjective form of happiness that may either be high or low depending on the experience of pain or pleasure.... The above external and superficial factors contribute immensely to the attainment of happiness.... Genetics also have a phenomenal determination on happiness since every person has an innate set point of happiness....
8 Pages (2000 words) Essay

Alternative Measures of GDP

The main substitute amongst the approaches have been learned to be the ‘economics of happiness' that intends to measure the welfare of the residents in the economy.... This method merges practices made by economists as well as psychologists with the intention to determine the degree of happiness in a particular society along with the policy that contributes to it.... This particular method goes more from the economists' perception of happiness which centered on ‘revealed performance' along with the beliefs that increased unpaid options that were available to an individual and make that individual happier (Nallari & Et....
10 Pages (2500 words) Research Paper

Labor unions. Workers, Industrialization and Happiness

Researchers have made a distinction on the definition of happiness as a short-term state of lighting up of the mind depending on the temperament of a person and the external factors associated with the person.... Workers, Industrialization and happiness Researchers have made a.... Workers, Industrialization and happiness ...
4 Pages (1000 words) Essay

Behind stories about happiness of economic in proportion or inverse proportion of economic crisis

The Economics of Happiness” Speeches - Board of Governors of the Federal Reserve System, May 2010.... Name Instructor Course Class date Workers, Industrialization, and happiness Introduction Economics is a discipline that has much to do with the well-being of human beings.... It emphases on the link between happiness and work that is more characterized with industrialization.... Several economists have tried to determine the effects of micro and macro-economic conditions on the happiness of workers....
3 Pages (750 words) Essay

The American Labor Sector of Today

In the essay 'The American Labor Sector of Today' the author discusses the American labor sector of today, which contrasts greatly with the labor sector of the early industrial days.... These movements portray the views that they have garnered a lot from the benefits they fought for.... ... ... ... The author states that the movements have also developed into large and complex organizations with interests that have a great affinity to those of the 'enemy' that is the industries....
5 Pages (1250 words) Essay

Work as Disutility: Definition and Interpretations

How many people are really satisfied with their job or work activity as they manage to combine the process of money earning with pleasure?... Taking into consideration lazy human nature, it is possible to.... ... ... est that the share of this category of people represents a minority while the majority of people perceive the work as one of the most common and appropriate instruments of supporting their lives and satisfying their basic needs....
8 Pages (2000 words) Essay

Measurement of Happiness

Bruni and Porta (2007), in their studies and review of existing literature on the subject, found that consumption drives The Economics of Happiness.... The paper "Measurement of happiness" describes that consumption and consumerism have permeated our lives and that money, the bodily needs, requirements and wants to dominate our concept of the good life at the expense of the previously dominating concepts in the lives of man.... Tibor Scitovsky suggested that pleasure is related to increases in stimulation and, hence, to the rate of growth of consumption but that the excessive innovation of new kinds of status goods have rendered the source of happiness to be accessible to many, causing the stagnation of happiness, especially in developed countries....
6 Pages (1500 words) Coursework

Can Rich Countries Increase Life Satisfaction by Increasing GDP per Capita

Some scholars are of the view that an increase in income leads to increased life satisfaction (Deaton, 2008; Clark and Oswald, 1996).... ... ... ... The paper "Can Rich Countries Increase Life Satisfaction by Increasing GDP per Capita" is an outstanding example of a macro & microeconomics essay.... A raging debate has been going on for decades now on the relationship between life satisfaction and the incomes of individuals (Easterlin, 1995)....
6 Pages (1500 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us