A link to the article.
From the mouth of this very bright horse:
The choice in each of these thought experiments is one between conspicuous consumption (in the form of larger houses) and what, for want of a better term, I shall call inconspicuous consumption — freedom from traffic congestion, time with family and friends, vacation time, and a variety of favorable job characteristics. In each case the evidence suggests that subjective well-being will be higher in the society with a greater balance of inconspicuous consumption. And yet in each case the actual trend in U.S. consumption patterns has been in the reverse direction.
So why, we should ask, is the U.S. consistently spending money on the stuff that won’t make us happier? He’s got a great explanation for this. Basically, the idea centers on the observation that for certain things, the returns on our investment is very much relevant to how much other money people are spending on the same thing (he calls these types of expenditures “context dependent”). If you want to look good for a job interview, the real goal is to look better than the other people, and you may try to do that by spending more money on your clothes, which will make everyone else pay more for their clothes, which makes you pay more for your clothes. (Rinse, repeat.) There are, likewise, types of spending that are less context dependent, where your benefit is quite independent from what other people are spending; by decreasing noise pollution in your own neighborhood, you don’t make it any harder for another person to do the same in her own.
The effect of this discrepancy is that we tend to get spend money where our dollars must compete against each other’s – an arms race – rather than on the things where our gains are absolute. And Frank postulates that, quite tragically, spending on conspicuous consumption (bad stuff) is much more context dependent than spending on inconspicuous consumption (good stuff). So we are generally suckered into spending money on things that won’t make us happy, because everyone else is doing the same, and we won’t get results unless we outbid them. The arms race prevents us from spending money on really productive things; extending the metaphor, our arms race is leeching all the money we should be spending on education.
Sad, isn’t it? thinkness’ll send a nickel to anyone who can figure out how to stop this process.
By the way, there’s one great little bit of this article that doesn’t really fit into the main thrust here, but is too good to pass over:
Unpredictable noise may be particularly stressful because it confronts the subject with a loss of control. David Glass and his collaborators confirmed this hypothesis in an ingenious experiment that exposed two groups of subjects to a recording of loud unpredictable noises. Whereas subjects in one group had no control over the recording, subjects in the other group could stop the tape at any time by flipping a switch. These subjects were told, however, that the experimenters would prefer that they not stop the tape, and most subjects honored this preference. Following exposure to the noise, subjects with access to the control switch made almost 60 percent fewer errors than the other subjects on a proofreading task and made more than four times as many attempts to solve a difficult puzzle.
