September 29, 2009

It's relative

Would you rather be a big cat or a small dog?

Developments in behavioral economics have challenged the old idea of humans as belonging to the species "homo economicus," a fabled creature that purportedly rationally acts in accord with its material self interest. Real humans often have other priorities, including things like a need for social status and a sense of fairness (which admittedly aren't always compatible).

One experiment cited by Michael Marmot in The Status Syndrome: How Social Standing Affects our Health and Longevity is a case in point:

...people are asked to imagine two situations. First, you live in a society where the average income is $100,000 and your income is $125,000. Now consider a new situation. Average incomes are now $200,00 and your income is $175,000. In the two societies, a dollar has the same purchasing power. Which situation would you prefer?

If people were really out to go for the bottom line, they would pick scenario #2. In reality, most people pick #1. As Marmot puts it, "They would rather sacrifice material gains for better social standing."

There are several ways to interpret these results. One would be that people are obsessed not just with keeping up with the Joneses but with burying them in the dust. A more charitable interpretation--and one that makes sense in light of other research--is that a key factor in peoples' sense of well being, and even of health and mortality, is the ability to fully participate in society.

Being at a material disadvantage in comparison with others in the same society can limit our sense of being able to fully participate. For that matter, a lot of research on things from health to violence indicates that relative poverty, i.e. one's position in comparison with others, is a major factor in causing lots of problems--and not just for those who are relatively poor.

More on this to come.

PAYING MORE TO DIE SOONER. Here's another critique of the American health care system.

ONE THING NOT TO FEAR, Dean Baker argues, is the public option in health care reform.

By the way, I heard last week that the vote on the public option may take place today in the Senate. I don't know whether this has changed. Still, it wouldn't be a bad idea to make yet another call.

STATING THE OBVIOUS. The AFLCIO blog points out that millions of Americans already rely on government-provided health care. And they're not trying to get rid of it.

INCONSISTENCIES. This Gazette op-ed by a friend of mine looks at some of these on the right.


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