Tag Archives: growth

Economics

Beware. Economic Growth May Kill You

There is a long-held belief that economic growth and prosperity makes for a happier, healthier populace. Most economists and social scientists, and indeed lay-people, have subscribed to this idea for many decades.

But, this may be completely wrong.

A handful of contrarian economists began noticing a strange paradox in their research studies from 2000. Evidence suggests that rising incomes and personal well-being are linked in the opposite way. It seems that when the US economy is improving, people suffer more medical problems and die faster.

How could this be? Well, put simply, there are three main factors: increased pollution from increased industrial activity; greater occupational hazards from increased work; and, higher exposure to risky behaviors from greater income.

From the Washington Post:

Yet in recent years, accumulating evidence suggests that rising incomes and personal well-being are linked in the opposite way. It seems that economic growth actually kills people.

Christopher Ruhm, an economics professor at the University of Virginia, was one of the first to notice this paradox. In a 2000 paper, he showed that when the American economy is on an upswing, people suffer more medical problems and die faster; when the economy falters, people tend to live longer.

“It’s very puzzling,” says Adriana Lleras-Muney, an economics professor at the University of California, Los Angeles. “We know that people in rich countries live longer than people in poor countries. There’s a strong relationship between GDP and life expectancy, suggesting that more money is better. And yet, when the economy is doing well, when it’s growing faster than average, we find that more people are dying.”

In other words, there are great benefits to being wealthy. But the process of becoming wealthy — well, that seems to be dangerous.

Lleras-Muney and her colleagues, David Cutler of Harvard and Wei Huang of the National Bureau of Economic Research, believe they can explain why. They have conducted one of the most comprehensive investigations yet of this phenomenon, analyzing over 200 years of data from 32 countries. In a draft of their research, released last week, they lay out something of a grand unified theory of life, death and economic growth.

To start, the economists confirm that when a country’s economic output — its GDP — is higher than expected, mortality rates are also higher than expected.

…

The data show that when economies are growing particularly fast, emissions and pollution are also on the rise. After controlling for changes in air quality, the economists find that economic growth doesn’t seem to impact death rates as much. “As much as two-thirds of the adverse effect of booms may be the result of increased pollution,” they write.

…

A booming economy spurs death in other ways too. People start to spend more time at their jobs, exposing them to occupational hazards, as well as the stress of overwork. People drive more, leading to an increase in traffic-related fatalities. People also drink more, causing health problems and accidents. In particular, the economists’ data suggest that alcohol-related mortality is the second-most important explanation, after pollution, for the connection between economic growth and death rates.

This is consistent with other studies finding that people are more likely to die right after they receive their tax rebates. More income makes it easier for people to pay for health care and other basic necessities, but it also makes it easier for people to engage in risky activities and hurt themselves.

Read the entire story here.

BigBang

You Are Different From Yourself

The next time your spouse tells you that you’re “just not the same person anymore” there may be some truth to it. After all, we are not who we thought we would become, nor are we likely to become what we think. That’s the overall result of a recent study of human personality changes in around 20,000 people over time.

[div class=attrib]From Independent:[end-div]

When we remember our past selves, they seem quite different. We know how much our personalities and tastes have changed over the years. But when we look ahead, somehow we expect ourselves to stay the same, a team of psychologists said Thursday, describing research they conducted of people’s self-perceptions.

They called this phenomenon the “end of history illusion,” in which people tend to “underestimate how much they will change in the future.” According to their research, which involved more than 19,000 people ages 18 to 68, the illusion persists from teenage years into retirement.

“Middle-aged people — like me — often look back on our teenage selves with some mixture of amusement and chagrin,” said one of the authors, Daniel T. Gilbert, a psychologist at Harvard. “What we never seem to realize is that our future selves will look back and think the very same thing about us. At every age we think we’re having the last laugh, and at every age we’re wrong.”

Other psychologists said they were intrigued by the findings, published Thursday in the journal Science, and were impressed with the amount of supporting evidence. Participants were asked about their personality traits and preferences — their favorite foods, vacations, hobbies and bands — in years past and present, and then asked to make predictions for the future. Not surprisingly, the younger people in the study reported more change in the previous decade than did the older respondents.

But when asked to predict what their personalities and tastes would be like in 10 years, people of all ages consistently played down the potential changes ahead.

Thus, the typical 20-year-old woman’s predictions for her next decade were not nearly as radical as the typical 30-year-old woman’s recollection of how much she had changed in her 20s. This sort of discrepancy persisted among respondents all the way into their 60s.

And the discrepancy did not seem to be because of faulty memories, because the personality changes recalled by people jibed quite well with independent research charting how personality traits shift with age. People seemed to be much better at recalling their former selves than at imagining how much they would change in the future.

Why? Dr. Gilbert and his collaborators, Jordi Quoidbach of Harvard and Timothy D. Wilson of the University of Virginia, had a few theories, starting with the well-documented tendency of people to overestimate their own wonderfulness.

“Believing that we just reached the peak of our personal evolution makes us feel good,” Dr. Quoidbach said. “The ‘I wish that I knew then what I know now’ experience might give us a sense of satisfaction and meaning, whereas realizing how transient our preferences and values are might lead us to doubt every decision and generate anxiety.”

Or maybe the explanation has more to do with mental energy: predicting the future requires more work than simply recalling the past. “People may confuse the difficulty of imagining personal change with the unlikelihood of change itself,” the authors wrote in Science.

The phenomenon does have its downsides, the authors said. For instance, people make decisions in their youth — about getting a tattoo, say, or a choice of spouse — that they sometimes come to regret.

And that illusion of stability could lead to dubious financial expectations, as the researchers showed in an experiment asking people how much they would pay to see their favorite bands.

When asked about their favorite band from a decade ago, respondents were typically willing to shell out $80 to attend a concert of the band today. But when they were asked about their current favorite band and how much they would be willing to spend to see the band’s concert in 10 years, the price went up to $129. Even though they realized that favorites from a decade ago like Creed or the Dixie Chicks have lost some of their luster, they apparently expect Coldplay and Rihanna to blaze on forever.

“The end-of-history effect may represent a failure in personal imagination,” said Dan P. McAdams, a psychologist at Northwestern who has done separate research into the stories people construct about their past and future lives. He has often heard people tell complex, dynamic stories about the past but then make vague, prosaic projections of a future in which things stay pretty much the same.

[div class=attrib]Read the entire article after the jump.[end-div]