welfare

Happiness Is Not Utility

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2014-11-14 City and Rural Area Happiness

In recent years, economists and policy makers have started to measure happiness (“subjective wellbeing”) and design policies to maximize it. In a paper for Vox, researchers point out that happiness isn’t the same thing as utility or welfare. This means that a government’s attempts to maximize happiness may work to undermine social welfare.

In a series of novel experiments and surveys, Benjamin et al. (2011, 2012, 2013) conduct surveys about actual or hypothetical choices people make and measure the expected happiness associated with each choice. They find that actual choices and happiness-maximising choices are positively correlated. But they are not identical. Respondents are prepared to sacrifice happiness in furtherance of another objective, such as a higher income (Benjamin et al. 2011).

The researchers conducted their own research into choices people make about where to move and confirmed the basic finding: people are willing to move to unhappy places if there is an economic incentive to do so. This means that happiness is only one variable that people are trying to maximize in their lives. They have other goals. Income might be one but, as the researchers note, other ideals like “freedom, nobility, and self-respect” might also play a role.

This isn’t just academic. It’s actually another stern lesson about the limits of centralized planning to improve our lives. Underlying this entire discussion is one simple fact: no one actually knows what human beings are trying to maximize. The concept of “social welfare” is undefined, and so efforts to use policy to maximize it are suspect, at best. A better aim is probably to try and maximize freedom so that people will be best able to maximize their own welfare as they choose to define it, rather than relying on some universal definition being imposed society-wide.

Family Instability and Wages

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Marriage historian Stephanie Coontz has an interesting piece in The New York Times on rising family instability. Commenting on male and female wages, she states,

Today, job prospects for young men are far less favorable. Real wages for men under age 35 have fallen almost continuously since the late 1970s, and those with only a high school diploma have experienced the sharpest losses. Between 1979 and 2007, young male high school graduates saw a 29 percent decline in real annual earnings — an even steeper decline than the 18 percent drop for men with no high school diploma…Women’s wages, by contrast, have risen significantly since the 1970s, except for those on the very bottom…Meanwhile, women’s expectation of fairness and reciprocity in marriage has been rising even as men’s ability to compensate for deficits in their behavior by being “good providers” has been falling. Low-income women consistently tell researchers that the main reason they hesitate to marry — even if they are in love, even if they have moved in with a man to share expenses, and even if they have a child — is that they see a bad marriage or divorce as a greater threat to their well-being than being single.

She concludes,

If women lowered their expectations to match men’s lower economic prospects, perhaps marriage would be more common in low-income communities. But it would most likely be even less stable, and certainly less fair. Turning back the inequality revolution may be difficult. But that would certainly help more families — at almost all income levels — than turning back the gender revolution.

This piece goes nicely with a recent review in The Wall Street Journal by sociologist and National Marriage Project director W. Bradford Wilcox, in which he points out,

Although the authors put too much stress on economic explanations-their approach cannot explain, for instance, why the economic dislocation of the Depression did not result in high levels of family breakdown in the 1930s-the story told by “Marriage Markets” is worth heeding, whatever one’s political affiliations. Conservatives need to take note of the growing family divide in part because fragile families require more public aid, from Medicaid to food stamps: As marriage goes, so goes the tradition of limited government. Progressives, for their part, might well worry that the family divide begets not only economic disparity but also gender inequality. After all, communities where fathers are largely absent from their children’s day-to-day lives do not come close to approximating the egalitarian ideal championed by today’s left-of-center thinkers and activists.

…What, then, is to be done? Ms. Carbone and Ms. Cahn offer a number of good suggestions, such as job-relocation grants for laid-off workers (to help them move away from high-unemployment regions to those with jobs) and portable health plans that allow workers to seek out the best job opportunities instead of clinging to bad, low-paying jobs for the sake of their benefits.

But the authors also think that the way forward requires strategies designed to “enhanc[e] women’s power”-such as “improved access to contraception.” …Perhaps. But a stronger case could be made that the bigger challenge facing working-class and poor families is not a lack of female empowerment but rather that contemporary masculinity has been decoupled from work, fatherhood and marriage-and for reasons that are not entirely economic.

Good stuff. Check them out.

 

3 Factors of Economic Mobility

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Sociologist W. Bradford Wilcox of the University of Virginia has an excellent piece in The Atlantic, which analyzes data from the Equality of Opportunity Project on what factors contribute to economic mobility. Wilcox finds three main factors: (1) Per-capita income growth, (2) Prevalence of single mothers (negative), (3) Per-capita local government spending (likely a proxy for education spending or public transportation).

 

 

Wilcox concludes,

As the nation marks the 50th anniversary of the War on Poverty this week, it’s worth considering that our attention to income inequality, although well-meaning, is distracting us from the most important pieces in the poverty puzzle. Growth, marriages, and local governments are three issues deserving more attention in our efforts to renew the American Dream for the nation’s poorest citizens.

What Are “Obamaphones”?

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2013-08-02 Obamaphone

I’ve heard lots about so-called “Obamaphones”, but this is the first article that really explained what’s going on.

The Federal Communications Commission oversees the so-called Lifeline program, created in 1984 to make sure impoverished Americans had telephone service available to call their moms, bosses, and 911. In 2008, the FCC expanded the program to offer subsidized cell-phone service…

The rest of the article is really easy to predict once you know just one simple fact: the companies are paid by the government for every cell phone plan they create. If you’ve got a company that’s supposed to only hand out one free cell phone per household, but they’re getting paid by the cell phone, what do you think will happen? Jillian Kay Melchoir (who wrote this piece) decided to find out. Although she doesn’t qualify for any phones and although she never lied on any of the applications, she ended up with a handful of free phones anyway. She got progressively sillier in her attempts to get new phones, culminating in a scene like this one: 

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