Naked Economics

we quickly become inured to the benefits of the goods that we previously coveted (kind of like getting used to a hot bath), whereas the happiness generated by experiences (family vacations and their lingering memories) is more durable. The Economist summarizes the prescriptions of the research so far: “In general, the economic arbiters of taste recommend ‘experiences’ over commodities, pastimes over knick-knacks, doing over having.”

For example, that long commute may not be worth what it buys (usually a bigger house and a higher salary). Not only is the commute unpleasant, but it often carries a high opportunity cost: less time spent socializing, exercising, or relaxing—all of which rate as highly pleasurable activities.

a lasting marriage is worth $100,000 a year, since married people report being as happy, on average, as divorced (and not remarried) individuals who have incomes that are $100,000 higher. So, before you go to bed tonight, be sure to tell your spouse that you would not give him or her up for anything less than $100,000 a year.

Leisure counts for nothing. If you spend a glorious day walking in the park with your grandmother, you are not contributing to GDP and may actually be subtracting from it if you’ve taken the day off to do it.

If an industry pollutes in the process of manufacturing products, and the government pays to clean up the mess, both activities add to GDP.”

A pair of stockings cost 25 cents in 1900. Of course, the average wage at the time was 14.8 cents an hour

Stockings in 2000 cost around $4, while America’s average wage was over $13 an hour.

“Making money takes time, so when we shop, we’re really spending time. The real cost of living isn’t measured in dollars and cents but in the hours and minutes we must work to live.”1

Our real GDP per capita is more than twice what it was in 1970 and five times what it was in 1940.

In other words, the average American is five times as rich as he or she would have been in 1940.

if a country’s economy grows 3 percent in a given year but the population grows 5 percent, then GDP per capita will fall.