There are Free Lunches Statement of Intentions

There are Free Lunches: Behavioral Clues to Live Happy in the Economic World is a blog that intends to present updated and relevant information about the "hidden" and only recently uncovered dimensions of the economic science: the behavioral factors. With this blog we intend to promote in Europe and in the rest of the World, the top research articles and perspectives on behavioral economics, decision making, consumer behavior, and general behavioral science. We aim to be followed by journalists, academics, managers, civil servants, and everyone who wishes to improve their daily interaction with the economic world and consequently, their lives' happiness.

Saturday, 16 April 2011

If Money Doesn't Make You Happy Then You Probably Aren't Spending It Right

Why this Post? This first post is based on an article from Dunn, Gilbert, and Wilson (2010) which propose us 8 principles to help us get more happiness from our money. We decided to dedicate a post to each of these 8 principles because this article was one of the reasons why we decided to start this blog and also because we think it's a revolutionary paper that creates an idea - happiness for money - whose time has come. Money & Happiness The relation between money and happiness has been scientifically studied and results point to a surprisingly low relation - especially low when compared with the expectations of people who don't have much money. This result should puzzle more than it does. Besides allowing people to buy "better toys", money also allows people to live better and wealthier lives, to have more control over the nature of their daily activities, to buffer themselves against worry and harm - all ingredients in the recipe for a happy life. So, the puzzle is: if wealthy people are not that much happier than those who have less, why is it that they are not? People don't Spend it Right The majority of people don't know the scientific facts about happiness - what brings it and sustains it - so they don't know how to better invest their money to acquire it. Just like wealthy people who know nothing about wine end up with cellars that are not much better stocked than their neighbours’', wealthy people who know nothing about happiness end up with lives that aren't that much happier than anyone else's. Money can be an opportunity for happiness, but only if we know what are the things that can make us happy. The good news is that there is affective forecasting literature which explains why we often don't spend money in ways that maximize our happiness, and that literature originated 8 principles we can adopt to avoid that. These principles will be presented in our next 8 posts.

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