The Economist - Why Dont Rising Incomes Make Everybody Happier - Essay Example

Read the Story Read the Story Gift Giving Question According to The Economist (2001), in order to ensure that the gift bought issuccessful, the buyer has to ensure that they are well aware of the receiver’s preferences. The article argues that, at the simplest level, offering gifts involves the provider considering something, which the receiver would love—he/she tries to presume her preferences—and then purchasing the gift and giving it. But normally the guessing is done badly (The Economist, 2001). The article also goes forward to claim that even if a gift is liked, it might not be what the person would have obtained had they had the cash themselves. Question 2 According to The Economist (2001), if the giver offered the cash value of the receiver to buy the gift instead of giving the gift itself, the receiver could then purchase what she truly wants, and be happier for no extra cost. The article reached this finding by asking two university students of whether the valued the gift that were offered to them during the past Christmas period. The most conventional approximation put the standard receivers valuation at 90 percent of the buying price (The Economist, 2001). The missing 10 percent is what economists refer to as deadweight loss: a waste of resources, which could be avoided without making anybody worse off. Question 3 Non-money gifts from extended family members were discovered to be least efficient. The most efficient/appreciated gifts, also those with the least deadweight loss, were considered to be those from close relations and friends, whereas non-cash gifts from normal family members “extended family” were considered to be the least efficient (The Economist, 2001). As the age disparity between the provider and beneficiary grew, so did the ineffectiveness of the gift. All of which propose what a lot of grandparents discern: when purchasing gifts for an individual with fundamentally unidentified preferences, the best gift is one, which is entirely flexible, such as money cash, or very supple, such as gift vouchers (The Economist, 2001). Question 4 This article argues that giving a gift of value not only good for the receiver, but the provider, as well. People buy a gift to please the receiver, and when the receiver is pleased, there is a mutual feeling in the giver too. I remember the first time is spent a valentine’s day with my girlfriend that I had to save plenty of cash to get her a pair of doll shoes that she had been admiring a lot. The shoes cost me $60, but the moment I saw the smile in her face when I gave them to her, the amount of money was insignificant. It made me happy just to see that smile. Economic Focus Question 1 According to The Economist (2003), people, rich or not rich, are no happy are people would expect them to be because of the high rise in living standards. When comparing them to the people of the 50’s, those days, the living standards used to be slightly lower compared to now and so was the amount of wealth in people’s pocket. That is why people of the 50’s were not so happy. Now, the number of wealthy people has gone up and so are the living standards (The Economist, 2003). Things there regarded as luxuries in the past are now considered as necessities. Rich people, in spite of their abundant money, have more responsibilities rendering their money somehow insignificant. Question 2 It is fair to argue that Americans work more severely compared to their European counterpart all in an effort of chasing the American dream. This all comes down to the focus of how a nation has been shaped to believe where happiness comes from. Americans believe that material wealth brings happiness, but Europeans, on the other hand, believe that happiness can be equated to a lot of leisure time (The Economist, 2003). According to this article, Americans would rather work longer hours to pay higher taxes, but in the center of this all, they are also receiving higher incomes compared to their European counterparts. Happiness is how one was shaped to believe, and both Americans and Europeans have different views. Question 3 It is tough to argue against income as a source of happiness, but the fact is that high income is never the source of happiness. Everybody who works at a high paying job (if it was not their lives’ dream) is always complaining of how their job is tiring due to one simple fact that, that it not what they, in fact, wanted to do as a career. People who are, on the other hand, chasing their lives’ dreams, be it be money, never get tired of the challenge no matter the journey to attain it. The pursuit of wealth and material things can lead to happiness if these are someone’s visions, but if not, then they cannot lead to happiness. Extra Credit Essay Part One Receiving $50 million would definitely cause a breakthrough in my life. All the economists out there know that your amount of needs increase with the amount of funds you have. I might try to hide it, but the fact is that, that money will enable me to buy my dream car, my dream house in a luxurious neighborhood and also attract a beautiful wife. The types of good that I will buy are basically luxurious products because the funds allow. Things will not necessary be bought I bulk because I have to plan well; no amount of money is ever enough it this world. As an American citizen, we try to achieve the American dream by having a substantial amount of wealth and this kind of money will definitely take me there is properly used. Part Two If I am surrounded with this kind of money and luxurious goods and services, I would be happy. However, this kind of money can only make me happy in the long run if I use it the right way. There is no denying that people need capital to establish themselves. You might have a dream business of a career that needs capital to reach there. Therefore, these funds would at least enable me to go to school and chase my dreams or maybe start that business that I really long for. I would be happy driving around in slick cars or sailing around in yachts. Even though, this might get old, I would still need them. Having a car is a necessity and because I have an abundant supply of money, I can only go for the luxurious ones such as Ferraris and Rolls Royces among others. References The Economist. (2001). Is Santa a deadweight loss? Are all those Christmas gifts just a waste of resources? Retrieved from http://www.economist.com/node/885748 The Economist. (2003). Chasing the dream. Why dont rising incomes make everybody happier? Retrieved from http://www.economist.com/node/885748 Read More