How not to buy happiness  AUG 06 2004

Robert Frank has an article in the journal Daedalus on how not to buy happiness (via Peter). Frank suggests that money can buy you happiness, but only if you spend it correctly:

Considerable evidence suggests that if we use an increase in our incomes, as many of us do, simply to buy bigger houses and more expensive cars, then we do not end up any happier than before. But if we use an increase in our incomes to buy more of certain inconspicuous goods -- such as freedom from a long commute or a stressful job -- then the evidence paints a very different picture. The less we spend on conspicuous consumption goods, the better we can afford to alleviate congestion; and the more time we can devote to family and friends, to exercise, sleep, travel, and other restorative activities. On the best available evidence, reallocating our time and money in these and similar ways would result in healthier, longer -- and happier -- lives.

The use of income to buy "inconspicuous goods" is a pretty apt description of how I've spent any extra income as I've gotten older and earned more. A bigger house, the newest gadget, finer clothes, a shiny car...those things don't appeal to me that much, which makes me something of an anomoly in the US I think. I've used my income to move to a new city, take some time off of work, travel, and more carefully choose what I want to do for employment. I rarely buy a "better" version of something I already have...I'm a very suspicious upgrader, even when it comes to software. I don't know that I'm any happier because of this approach, but I know I wouldn't be very pleased if I couldn't go on vacation because I'm spending all my money on a bigger apartment.

Anyway, the article is excellent if you've got time to read it. A Professor of Economics at Cornell University, Frank has written a few books related to this topic, among them Luxury Fever, The Winner-Take-All Society, and Choosing the Right Pond: Human Behavior and the Quest for Status. Related articles by Frank include When Less is Not More (NY Times), Why Living in a Rich Society Makes Us Feel Poor (NY Times Magazine), Talent and the Winner-Take-All Society (The American Prospect), and Market Failures (Boston Review).

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