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Modern Wisdom

#657 - Erik Angner - An Economist’s Guide To A Happy Life

Sat Jul 22 2023


This episode explores the intersection of economics and happiness, covering topics such as living a good life, decision-making, parenthood, fertility, expectations, goals, inequality, health, adaptation, religion, employment, relationships, and the impact of various conditions on happiness. It delves into the factors that influence happiness and well-being, providing insights into how individuals can maximize their overall satisfaction in life.


Economics provides data-driven insights into living a happy, fulfilling life

By considering the economic implications and perspectives on decision-making processes, individuals can make choices that maximize their happiness and well-being.

Parenthood may not bring happiness but contributes to well-being and meaning

Having children can provide a sense of purpose and fulfillment, even though financial satisfaction tends to decrease due to the high costs involved.

Expectations and aspirations play a significant role in happiness

Happiness is influenced by what individuals attain and how much they aspire for. Setting realistic goals and managing expectations can lead to greater well-being.

Inequality can impact total happiness

While some inequality reflects individual preferences and can contribute to overall happiness, large wealth disparities and comparisons with others can lead to harmful effects on well-being.

Health conditions and adaptation affect happiness levels

Individuals have the ability to adapt to different levels of happiness depending on their circumstances. Some health conditions may be easier to adapt to than others.

Religion and employment are important factors for happiness

Religious affiliation and community involvement can contribute to happiness, while unemployment can lead to feelings of redundancy and loss of social connections.

Adapting to conditions can impact happiness

People have the ability to adapt to both negative and positive conditions, but certain challenges like chronic pain can have a lasting effect on well-being.


  1. Economics and Living a Good Life
  2. Economics and Decision-Making
  3. Parenthood and Well-being
  4. Fertility and Decision-Making
  5. Expectations, Well-being, and Happiness
  6. Goals, Achievement, and Happiness
  7. Comparative Advantage and Happiness
  8. Inequality and Happiness
  9. Health, Adaptation, and Happiness
  10. Religion, Employment, and Relationships
  11. Adaptation and Happiness
  12. Adaptation and Happiness (Continued)

Economics and Living a Good Life

00:00 - 07:31

  • Economics provides data-driven insights into living a happy, fulfilling life
  • The four pillars of living a good life according to economics
  • Maximizing happiness from an economic perspective
  • The difference between men's and women's happiness
  • How to break addiction to material possessions

Economics and Decision-Making

07:02 - 14:32

  • Economic angle refers to the economic implications or perspectives on any problem or decision-making process
  • Economics focuses on the values, costs, and benefits involved in decision-making
  • Economics offers a way of looking at decisions that considers the costs and benefits involved.
  • Economists can present options and trade-offs to voters and citizens to make decisions about aging populations.
  • There would be benefits in engaging with stakeholders and involving them in decision-making processes.

Parenthood and Well-being

14:14 - 21:26

  • Having children may not bring happiness, but it can still be a good thing in terms of well-being and meaning.
  • People with kids often feel part of something bigger and give satisfaction to their parents.
  • However, financial satisfaction tends to decrease when you have children due to the high costs involved.
  • Declining birth rates and crises of fertility are influenced by an over-prioritization of immediate comfort and convenience.
  • The culture values immediate happiness and is not conducive to meaning-making, which children contribute to.
  • Parenting has become harder as we live far from our families and have heavy workloads.
  • Young people face obstacles in having kids due to financial burdens and career demands.

Fertility and Decision-Making

21:01 - 28:59

  • Educated women have the biggest disparity between desired and realized fertility.
  • The desire to have children may be correlated with intelligence and education.
  • Constraints on having children differ across countries, influenced by culture, development, and public policies.
  • Public policies like parental leave and healthcare make it easier for parents in some countries.
  • In the US, limited parental leave and tied healthcare to employment create challenges for new parents.

Expectations, Well-being, and Happiness

28:30 - 35:41

  • Money can buy happiness up to a certain point, but there are diminishing marginal returns as income increases.
  • More money generally makes poor people happier, but the relationship becomes less significant for the very rich.
  • Satisfaction with life may continue to rise even if happiness levels taper off for the very rich.
  • Happiness is influenced by expectations and aspirations more than judgments of satisfaction.
  • Expectations affect happiness, as seen in students' reactions to exam grades.
  • Lowering standards is not the solution for happiness.

Goals, Achievement, and Happiness

35:19 - 41:54

  • John Henry was an African-American folk hero and tragic hero who built railroads.
  • He competed with a machine and won, but died in victory.
  • Happiness is influenced by what you attain and how much you aspired for.
  • People with high goals may attain more but are less happy.
  • Accomplishing meaningful goals can lead to well-being despite misery during the process.
  • There are no interventions known to decrease expectations without decreasing aspirations.
  • Expectations, well-being, happiness, and aspirations are interconnected concepts.
  • Overachievers purposefully design systems to consistently achieve high goals.
  • Setting limits on goals can help avoid self-sabotage and maximize well-being.

Comparative Advantage and Happiness

41:34 - 48:38

  • Focusing on your comparative advantage and letting go of tasks you're not good at
  • The purpose of doing a hobby is to enjoy it, not to become better at it
  • Drawing boundaries and letting go of high standards can reduce psychological suffering
  • Consistent practice is more important than constantly measuring up to others' performance
  • Committing to a plan is the best way forward once you've selected a goal
  • Spending time on insignificant tasks can distract from more important ones

Inequality and Happiness

48:23 - 55:26

  • Some inequality is good for total happiness as it reflects individual preferences.
  • Inequality can harm total happiness, especially when there is a large wealth disparity.
  • Comparing ourselves to others can lead to harmful arms races and unnecessary spending.
  • Opting out of materialism and favoring experiences over possessions can increase happiness.
  • GDP does not reflect how wealth is distributed within a country.

Health, Adaptation, and Happiness

54:57 - 1:02:23

  • GDP is an average and doesn't say anything about how resources are distributed
  • There are no major sex differences in happiness, but depression and anxiety rates differ between genders
  • Life satisfaction follows a U-shaped curve, bottoming out around age 44
  • Factors like having teenage kids can affect happiness levels in middle age
  • Happiness data varies depending on what factors are controlled for
  • Challenges faced by men and women in the dating market cannot be compared directly
  • Depression and happiness do not always correlate strongly
  • Mental health and well-being are multi-dimensional
  • Unhappiness in the dating market can involve unrealistic aspirations
  • Religiosity is correlated with higher levels of happiness, but racial disparities may exist within religiosity levels
  • Poverty, unemployment, poor health, and religiosity are indicative of happiness levels

Religion, Employment, and Relationships

1:02:07 - 1:08:55

  • Religious affiliation and community involvement are conducive to happiness.
  • Conservatives argue that religion is good for a person, while Marxists believe it has a soothing effect.
  • Unemployment not only affects income but also leads to feelings of redundancy, unappreciation, and loss of social connections.
  • Having a decent job and companionship are important for human happiness.
  • The impact of having siblings on happiness varies depending on the quality of the relationship.
  • Being an only child may provide more adult contact with parents but can also depend on likability as a child.
  • Health conditions can be adapted to, allowing individuals to still enjoy life's pleasures.
  • The extent to which health affects one's ability to enjoy solitude depends on individual circumstances.

Adaptation and Happiness

1:08:26 - 1:10:21

  • Conditions like poor eyesight or being in a wheelchair may not necessarily lead to low happiness, as it depends on the societal conditions and adaptations made.
  • People have the ability to adapt to different levels of happiness, similar to how our eyes adapt to different levels of light in a room.
  • Adapting to negative conditions can be functional in certain situations, such as adapting to life in jail when unjustly accused.
  • However, some people adapt to good conditions and become unhappy despite their affluence.
  • The speaker shares a personal experience of rupturing their Achilles tendon and the distressing impact it had on their health and fitness.
  • Chronic pain is difficult to adapt to as it interferes with daily activities and serves as a constant reminder of illness.
  • Other conditions, like prostate problems or slow-developing cancer, may be easier to adapt to over time.
  • Conditions that are easier to adapt to will have less impact on happiness compared to those that are more challenging.

Adaptation and Happiness (Continued)

1:08:26 - 1:10:21

  • Some conditions are easier to adapt to than others and do not harm happiness as much over time.
  • Incontinence affects every domain of life and has a lasting effect on happiness levels.
  • Eric Angner recommends his book 'How Economics Can Save the World'.