L4 Income and Money Flashcards Preview

Subjective Well-Being > L4 Income and Money > Flashcards

Flashcards in L4 Income and Money Deck (14):
1

The economist model

People make choices to maximize their utility
Higher income maximizes the number of choices people can make and things they can get and experience, therefore they are able to make better choices
Income = happiness (utility)

2

Declining marginal utility

The more you have, the more it takes to make a difference
Income and SWB in different groups
- US probability sample 0.12
- Calcutta slum dwellers 0.45
- Calcutta sex workers 0.67

3

The wealth of nations

Money matters, 0.83 correlation with life satisfaction

4

Why are rich nations more satisfied?

Healthcare, more possibilities, security

5

Easterlin's Paradox

Income and rising aspirations in the US
Most findings show that more nations increase in SWB as income rises, but there are many exceptions
As the comparison standard increases, based on wealthiest nations, and as the world gets richer, people are barely more satisfied, they want more
Frustrated achievers

6

Happiness and money

Difference between basic needs and modern conveniences / luxuries
- both affect life satisfaction
Basic needs (like food, shelter, health)
- can be fulfilled- finite
- can be satisfied
Beyond basic- aspirations
- can be limitless- infinite
- can always be dissatisfied

7

The Law of Expanding Expenditures

Herbert Hoover
Just when the ends meet, someone moves the ends

8

Two types of wealth

Psychosocial wealth-- enjoyment
- ex. friends you can count on
Monetary wealth-- life satisfaction
- ex. electricity, basic needs
Both crossover

9

Toxic effects of materialism

Wanting money more than other values
Being materialistic decreases life satisfaction

10

Capitalism

Effective at creating goods and services, creates new desires through marketing

11

How money is spent matters

Spending on others and giving increases SWB- Dunn
Experiential purchases, like trips, are also good- Van Boven

Spending money on luxury goods often have a lesser effect

12

Money and Lottery Winners

4.0 vs. 3.8 on scale ratings
Slightly happier byt new problems

13

Income inequality

Top incomes much high in poor nations is associated with lower LS and higher NA
Inequality is associated with lower SWB, but this is buffered by income redistribution
When economic growth ends up in wealthier hands, there in no benefit to life satisfaction
- but when economic growth is distributed across the population, there is an increase in LS

14

Unemployment

Lowers SWB substantially, don't ever fully recover