Ah, the age-old question: does money buy you happiness? The general consensus is yes – to an extent. For example, surely the happiness a person gets from their billionth dollar is less than what they derived from their first dollar? Nobel Prize winners Daniel Kahneman and Angus Deaton (2010) formalised this idea using a survey of more than 450,000 responses from 1,000 people, concluding that:
Andrew Leigh delivered a great speech to the Economic Society of Australia in Canberra last week (alas I was not in attendance), in which he outlined his ‘Ten Lessons for Economic Policymakers’ in detail. Most were excellent, but he missed the mark on two of them by making a common mistake.