Monday, August 15, 2005

It's all relative!

Everything is relative.

Yeah we knew that, but there is a new study out that suggests even happiness is realtive. It is being widely reported today, but I do think it has a big impact in finance. Short version: everything is realtive.

Obviously this is not new. Indeed there was quite a bit on it Gregg Easterbrook's Progress Paradox.

Scotsman.com News - UK - Happiness is besting Joneses: "MONEY can buy you happiness - but only if you are richer than your neighbours, according to the results of research released yesterday.

Sociologists found that it was not strictly true to say that being well-off will not make a person happy.

But it depends on whether a person is able to 'keep up with the Joneses'"


"Glen Firebaugh, from Pennsylvania State University, who led the study, said: "We find, with and without controls, that the higher the income of others in one's age group, the lower one's happiness."

This could be used to look at financial implications in the areas of

1. Executive compensation
2. Globalization
3. Pay equity
4. Investor behavior
5. Trade

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