Monday, December 06, 2010

Finding Happiness

In the econ literature there is a pretty well known U shaped relationship between age and happiness, with happiness being at its lowest around middle age. So I thought that meant my happiness had nowhere to go but up.

It turns out that it is probably not true.
The inclusion of the usual socio-economic variables in a cross-section leads to a U-shape in age that results from indirectly-age-related reverse causality. Putting it simply: good things, like getting a job and getting married, appear to happen to middle aged individuals who were already happy. . . . The found effect of age in fixed-effect regressions is simply too large and too out of line with everything else we know to be believable. The difference between first-time respondents and stayers and between the number of years someone stays in the panel doesn't allow for explanations based on fixed traits or observables. There has to be either a problem on the left-hand side (i.e. the measurement of happiness over the life of a panel) or on the right-hand side (selection on time-varying unobservables).
But maybe I should just listen to Penelope Trunk and stop trying to be happy. Of course maybe I shouldn't take her advice, even if I wouldn't mind having sex with her - it would be different. Speaking of sex, I hear that helps improve happiness.

Previous musings on happiness.

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