Given my current line of work, people are oftentimes surprised to learn that I was an economics major in college. I found economics interesting and a great way way to develop keen critical thinking skills. However, there were basic assumptions inherent in economic theory that I found flawed. One major assumption, was that consumers are rational about how they spend their money and buy goods and services. However, I questioned if consumers actually spent in a manner that led to maximum value from their money? It seemed to me that people often spent money on goods and services that they did not even need, and certainly did not make them happier. C’mon, is buying an $80,000 Hummer or a $100 pair of jeans really going to make a person’s life that much better?
After a bit of investigation, I was pleased to see that empirical research has been done on the very subject that I had privately wondered about; money, happiness, and if a correlation (and of course causation) exists between the two. With unemployment comes greater scarcity of funds, and therefore during tough economic times it is all the more important to use our money in the best way possible. I hope this article helps provide the impetus to do so.
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