Book Review: Happiness Lessons from a New Science

I have just finished reading the book “Happiness: Lessons from a New Science” by Richard Layard. This book has a few controversial points, which people may find them disagreeable. However, I shall start with the more agreeable points first. Before I start, I shall state that this content in this book is lighter than most non-fiction books and it is not a bad read. The book can be found in NLB under 302.5 LAY.

1) We (humans) tend to seek happiness. That is, we would want to feel better.

2) We tend to prefer to be with company most of the time than to be alone. This is supported y research that friendship and marriage tend to improve happiness. Unemployment, on the other hand, lead to unhappiness as one of the reasons is that it cuts away the social ties one has with one’s former colleagues.

3) We will be happier if we can trust people more. For example, if you can trust your family, friends or colleagues, you tend to worry less and enjoy their company more.

4) We are attached to status quo. In other words, we hate losses more than we like gains (prospect theory). In addition, we would demand a higher price for an item that we owned compared to the price that we would pay for the same item if we do not own it (endowment bias).

5) We are status conscious. That is, we prefer to be among the winners and the elite compared to being among the losers and the weak. A personal example. Although I may have higher absolute portfolio return year-to-date compared to last year, I am feeling worse than I felt last year. This is because I am outperforming both STI and Sesdaq last year and I am underperfomring Sesdaq this year.

6) We are very adaptable to new situations. This is both good and bad. It is good as we may be happier than we thought if something bad happen to us. At the moment, the complaints about higher GST seem to die down and most people are adjusting themselves for the GST increase in July. This is unlike the scenario early this year, where complaints on GST and unhappiness on the GST increase are seen. Being adaptive is bad because we will get use to a happier situation such that the increase in happiness will slowly die off. For example, newly married couples would tend to feel happier than couples who had married for a few years.

7) Additional income increases happiness less and less when people become richer. For example, an additional $1 million may lead to more happiness in poor countries compared to the same additional amount in rich countries.

8) Finally, individuals have the means to increase their happiness. For example, more religious people or people who practices mediation tend to be happier.

Now I shall talk about the controversial points.

9) The author opines that the best society is the happiest. That implies that public policies should aim for higher overall happiness rather than the result of making more people happy. If a poor person gets more happiness when they receive an additional $1 compared to the loss of a $1 to the rich person, public policy should tax the rich for that $1 and distribute it to the poor person. This would increase overall happiness in the society, assuming that there is no distribution cost. Somehow this view runs counter to the prevalent view that we should lower income tax and tolerate higher income inequality so as to attract more talents and investments.

10) As mentally ill people tend to be more depressed compared to patients suffering from other illnesses, the author suggests devoting more resources to treat mentally ill people. This point is a bit controversial as the overall happiness criterion is used as the basis for resource distribution. Although I would support devoting more resources to treat the mentally ill patients, I also realize that the use of overall happiness criterion may not be the agreeable criterion for some people.

Comments

Popular posts from this blog

China Banks, Trimming down Position

Sell Sell stocks in SG market