How To Measure Happiness

Happiness is elusive but it helps focus an individual with their life design if they consider what metrics contribute to happiness. These metrics might be in error, but at least they are something. The 6 measures, as explained by NPR’s “The Indicator” podcast, are:

These measures have been found to be highly correlated with people’s overall happiness. Of these measures social support and GDP per capita are the most important. But at some point, GDP per capita stops mattering; the Easterlin paradox. “It’s the idea that wealth adds to people’s happiness only up to a point. And at some point, for some reason, getting richer stops making you happier.” There are many working theories and here are some of the more prominent ones:

  • GDP per capita (a rough idea of how wealthy people are in a particular country),
  • healthy life expectancy,
  • how much people trust the government and businesses in their country (is corruption a problem in the government? In businesses?),
  • social support (do you have somebody to count on in times of trouble?),
  • generosity (has a person been generous in the last 30 days to others) and
  • freedom (did you feel a sense of freedom to make your key life decisions?).
  1. (India #141, China #94) Social support has declined even though GDP per capita is rising. Stuff like moving into cities, decline of the extended family.
  2. (USA #19) “People overestimate the happiness they’re going to get from more income or a bigger house. And they underestimate the happiness they would get from more time with the family and less time spent commuting. So, they end up finding themselves in circumstances where they’ve chosen to go for too high an income, too much consumption, not enough time to spend with family and friends. And they end up being anxious, harried, stressed.”
  3. It could just be that the measurements are wrong.

Regardless, the researcher shares that he’s changed his behaviour as a result of this research and recommends “…[T]o start conversations with strangers, to smile at people in the streets, to assume the best rather than the worst about them is a win-win situation. And so, I do it more than I used to. And that’s improved my happiness. And I hope it’s improved somebody else’s, as well. …”

https://www.npr.org/sections/money/2019/04/08/711132741/how-to-measure-happiness

https://worldhappiness.report/

Canada is #9, Finland #1. Excel file with the data is here (“Chapter 2 – online data ‘Figure2.6’ worksheet):

https://s3.amazonaws.com/happiness-report/2019/Chapter2OnlineData.xls

Canada is just 6% behind Finland and USA is 12.72% behind (5.6% behind Canada). South Sudan, #156, is 272% behind Finland. Surprisingly Australia is at #11 with all it’s sunshine and most goods being locally sourced.

Easterlin Paradox:

https://en.wikipedia.org/wiki/Easterlin_paradox

Plastic single use bags – the economics

Planet Money explains in “Are Plastic Bag Bans Garbage?

“…sales of garbage bags actually skyrocketed after plastic grocery bags were banned…So about 30% of the plastic that was eliminated by the ban comes back in the form of thicker garbage bags…. On top of that, cities that banned plastic bags saw a surge in the use of paper bags, which she estimates resulted in about 80 million pounds of extra paper trash per year. paper bags are actually worse for the environment. … They require cutting down and processing trees, which involves lots of water, toxic chemicals, fuel, and heavy machinery. … the huge increase of paper, together with the uptick in plastic trash bags, means banning plastic shopping bags increases greenhouse gas emissions. That said, these bans do reduce non-biodegradable litter.”

Organic cotton tote bags need to be used 20,000 times before its use is better than a plastic grocery bag. “…the best reusable ones are made from polyester or plastics like polypropylene. . Those still have to be used dozens and dozens of times to be greener than plastic grocery bags, which have the smallest carbon footprint for a single use.”

“As for bag policies, Taylor says a fee is smarter than a ban. She has a second paper showing a small fee for bags is just as effective as a ban when it comes to encouraging use of reusable bags. But a fee offers flexibility for people who reuse plastic bags for garbage disposal or dog walking. … The best policy, Taylor says, imposes a fee on both paper and plastic bags and encourages reuse.”

15Apr2019 update: Another economics podcast on plastic packaging (Cellophane). It presents the data and decisions that have made the modern plastic world and illustrates nicely the counter-intuitive conclusions that come up all the time in plastic packaging.
https://www.bbc.co.uk/programmes/w3csz2w3

“A Christmas Carol” – The Economics Behind It

Charles Dickens’ A Christmas Carol was an attack on some of the then big minds of the “political economy” movement (now called Behavioural Economics). So ya, it was an economics novella. How cool is that!? Planet Money covers the economic history behind the famous yearly tradition.

https://www.npr.org/sections/money/2018/12/21/679213648/episode-883-a-very-planet-money-christmas-carol

Planet Money Talks Trade Wars And The Batman Problem

https://blog.forumias.com/protectionism-and-trade-war/Instead of a trade-war which impacts the global economy and hurts everybody, why not just use anti-currency manipulation to address the trade deficit? As explained by Planet Money’s “indicator” podcast it’s practically free. What it doesn’t do is buy politicians votes… The world economy just might be suffering in order for a politician to get re-elected…

https://www.npr.org/sections/money/2018/07/18/630265851/trade-wars-and-the-batman-problem

People on opposite sides of the globe with the same income level live very similarly

Visit dollar street to find how income affects how people live. Also startling… everyone in a 1st world nation is considered RICH! And unfortunately we take a lot for granted; like having a toothbrush. Bill Gates introduces the Dollar Street site here.  Explore Dollar Street in full here.

(11Sep2018 edit) The book Factfulness: Ten Reasons We’re Wrong About the World—and Why Things Are Better Than You Think by Hans Rosling describes the 4 levels of income groups and explains the kind of life these people have (similar to Dollar Street). Explore these income groups (which replaces the concept of developing vs developed world): https://www.gatesnotes.com/Books/Factfulness

 

Regulatory Capture is to Blame – Reducing RC starts with Education

What’s to blame for slower growth and rising inequality? Regulatory capture. And who practices Regulatory Capture? EVERYONE “Regulatory capture is a form of government failure which occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating. When regulatory capture occurs, the interests of firms or political groups are prioritized over the interests of the public, leading to a net loss for society. Government agencies suffering regulatory capture are called “captured agencies””. This is an issue that is a “bipartisan blind spot” and affects politicians from any political view.

“…[I]t’s ultimately the duty of the governors to make sure that the rules are in the public interest, rather than in the narrow interests of the various clamoring claimants who come before them.” The first step to eliminating regulatory capture is to recognize that it happens.

One of the reasons the public tolerates regulatory capture is that special interest groups use a positive policy image which creates a natural blind spot in the public’s eyes. An example used by Planet Money is teeth whitening and North Carolina’s Dental Board. The public feels that dentists help people so when the NC Dental Board lobbied to get a regulation to stop non-dentists from offering simple tooth whitening services the dentists initially won. Teeth whitening is more like a pedicure for your teeth rather than a dental procedure and anyone can do one. In fact, these days, people can buy teeth whitening kits at the grocery store. It had to go to the supreme court for the regulation to be removed. While waiting for all the legal trials to settle the issue stifled competition (natural market forces): teeth whitening service costs were artificially inflated (bad for consumers) and non-dentists were put out of business. Planet Money explains a few more examples and including one where homeowners practice regulatory capture.

 

Sources:

Planet Money’s story called “Rigging The Economy” https://www.npr.org/templates/transcript/transcript.php?storyId=592376568

https://en.wikipedia.org/wiki/Regulatory_capture

https://www.washingtonpost.com/outlook/whats-to-blame-for-slower-growth-and-rising-inequality/2017/11/22/97bb9e6c-b805-11e7-a908-a3470754bbb9_story.html?noredirect=on&utm_term=.dddf9ae2c60b

https://marketbusinessnews.com/financial-glossary/regulatory-capture-definition-meaning/

Has copyright holder litigation made a farce of copyright laws?

It’s #copyrightweek. Here’s some interesting material to help you decide:

Planet Money podcast “…bring[s] you an economist who set out to test a core political conviction. [Talks] to a novelist who came face-to-face with the shaky foundations of his ideas about copyright. ”

https://www.npr.org/sections/money/2017/06/23/534132561/episode-780-on-second-thought

And an insightful email from OpenMedia:

Hi <name>,

Since the 1700s, a form of copyright law has ensured creators could profit from their original work before it passed into the public domain. In the 20th century that began to change, as ‘rights holders’ more aggressively expanded the scope of these laws, profiting handsomely – often at the expense of the creators – and turning aggressive litigation, with tenuous connection to original work, into just another revenue stream.

Copyright law has now been captured by major media interests all over the world. That’s why digital rights organisations in Brazil, Pakistan, Canada and Austria all fight to make it better for everyone: accessible and open, not just owned by a few huge corporations.

Every year we see the absurd lengths corporate giants will go to to maintain this power:

A video of 5 hours of white noise has 5 different copyright take-down claims under YouTube’s ContentID system.1(that’s the system European decision makers want to expand to all user generated sites.)

Tractor owners have a black market in manuals because John Deere forbids farmers from fixing or tinkering with the expensive machinery that they have actually paid for.2

The European Commission buried research that proved links are actually good for the spread of news and information, because that was not what they wanted to hear when trying to sell their Link Tax.3

This week is Copyright Week, a global event bringing these groups together to plan what we will do to overhaul copyright laws, so they have a positive impact on our rights and on creativity once more rather than more of the stories we see above.

Just like us at OpenMedia, these organisations depend on their communities to make a difference.

You can share the ways you’ve made a difference on these issues using #copyrightweek.

I know our global community has had some great victories, like when Canadians spoke up to make sure that the dangerous Intellectual Property chapter from the Trans Pacific Partnership was dropped. The secretive trade agreement would have introduced strict punishments for infringement, even longer copyright terms and a global ‘notice and takedown’, leading to vast amounts of lost content online.

The most inspirational moment of last year for me was watching hundreds of people calling their MEPs about the Link Tax and against Censorship Machines, huge changes to how the web works that would limit free expression in the name of copyright enforcement for media giants. Key decision makers have heard those calls and put the upcoming vote on hold to come up with a better version, one that we hope won’t undermine our freedom of expression.

Copyright is currently used to deny people Internet access,4 to demand take-downs of original content,5 to deny people access to content based on where they live,6 and to silence the very fan communities that make or break pop culture.7 You can share your stories and read more about how these issues impact libraries, engineers, schools, universities, and artists by following #copyrightweek.

Thanks,

Ruth

Footnotes
[1] White noise take down video. Source: BoingBoing
[2] Why American Farmers Are Hacking Their Tractors With Ukrainian Firmware: MotherBoard
[3] Commission to scientists: Stop ruining our copyright plans with your facts and your research! Source: Julia Reda
[4] ‘Radical and overreaching’: Bell wants Canadians blocked from piracy websites: CBC News
[5] When I want to teach, but can’t thanks to Universal Music Group. Source: Adam Neely
[6] The reasons why geo-blocking must be stopped. Source: TechRadar
[7] Despite the certainty of takedowns, fan developers still pursue Nintendo’s works: Polygon

Jan 24, 2018 – Update

<Name>,

As you may have seen, yesterday Canada joined 10 other countries in signing onto a reworked version of the Trans-Pacific Partnership (TPP), now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).1,2

In a big win for the Internet, the new agreement suspends many of the controversial provisions included in previous versions, including the Intellectual Property (IP) chapter and ISDS (Investor-State Dispute Settlement) rules.3 These suspensions are not a coincidence — these were among the top concerns raised in over 18,000 emails sent to the government on behalf of concerned Canadians.4

This is all because of you, our community! The overwhelming majority of these submissions came from the OpenMedia community, using our Let’s Talk TPP tool.5 The Minister of International Trade, François-Philippe Champagne noted the influence of public feedback with regards to the IP chapter in the new version of the TPP.6

The improvements in the new TPP are a testament to all these years of pressure and relentless work. We never backed down, kept up the pressure, and finally the government listened.

However, even with these improvements, the CPTPP — and especially the process through which it was negotiated — is still deeply flawed. Discussions continue to be held behind closed doors, with little information available to the public.

Despite how far we’ve come, there’s still much to do. This week marks the 6th round of negotiations in NAFTA — yet another trade agreement where our digital rights are still at risk, and our government continues to negotiate in secret without the transparency we were promised.7

So we’ll still be here, working to make sure that the government is held accountable to its citizens, and does not ignore our digital rights. We need you to stand with us as we continue to demand transparency and accountability from the government, in the final stages of the TPP, the upcoming NAFTA agreement, and all ongoing trade negotiations.

These negotiations are supposed to benefit us all, and thanks to your efforts, we are much closer to that than we might have expected.

Everything you’ve done so far has led us here, so I want to say thank you, Trevor. It’s a big win in what has been a long and notoriously closed process.

Onwards,

Marie, on behalf of the OpenMedia team

P.S.: Our advocacy work against closed-door agreements like the TPP and NAFTA is kept alive with donations from supporters like you. If you can chip in $5 today, we would greatly appreciate your support!

Footnotes

[1]  Consolidated TPP Text: Government of Canada

[2] Canada reaches deal on revised Trans-Pacific Partnership: CBC

[3] Annex II – List of Suspended Provisions: Australian Government Department of Foreign Affairs and Trade

[4] When Consultations Count: Why the TPP is a Reminder of the Value of Speaking Out: Michael Geist

[5] Let’s Talk TPP: OpenMedia

[6] Statement by Minister of International Trade on successful conclusion of Comprehensive and Progressive Agreement for Trans-Pacific Partnership: Global Affairs Canada

[7] Trade secrets damage the credibility of NAFTA negotiations: The Globe and Mail

CR publishes much needed “Myths and Facts About Vaccines for Children”

https://www.consumerreports.org/vaccines/myths-and-facts-about-vaccines-for-children/

And the economics of vaccines – 20% IRR and 2 million deaths averted for the Global Alliance for Vaccines and Immunisation (GAVI) – a multi-organizational collaboration lasting 15-years worth $13B:

http://www.economist.com/node/5017166

Vaccinations are a case study of “The Tragedy of the Commons” – where anti-vaxxers become free-riders putting their self-interest over the common good. The Hastings Center explains this problem very well:

“…To understand why, think of vaccination and the quest for herd immunity as a collective action problem. Garrett Hardin’s “tragedy of the commons” illustrates the basic logic of collective action problems. Imagine that 50 farmers share common land (“the commons”) upon which they graze their sheep. The commons are lush, and so each farmer can easily allow four sheep to graze at a given time without depleting the resource. But imagine that each farmer seeks to maximize his own good (what economic theory refers to as “rational” behavior) and it is better for him to graze more sheep than fewer. The farmers will, in effect, be “free-riding” – in this case, taking more than their fair share of the common resource while benefitting from the restraint of others. The trouble is that, while adding one more sheep to the commons does not deplete the resource, adding 50 does. The combined actions of each farmer, acting rationally, leads to an outcome that is worse for all.

The tragedy of the commons reveals that what is good for the individual is at odds with what is good for all. This is the basic logic of collective action problems. We see a similar logic in the case of vaccines. If most get vaccinated, then everyone will be better off. But it would be best for any particular individual if all others got vaccinated and he or she did not. That way, the individual could enjoy the benefits of the common good (herd immunity) without bearing any of the costs (e.g., risk of possible side effects or complications associated with vaccine). This, again, is a free-rider temptation. The trouble is that if everyone thought that way, no one would become vaccinated and everyone would be at risk of falling ill.

From this perspective, anti-vaxxers are not ill-informed parents with distorted views of what is in their child’s best interest. They are acting perfectly rationally. The trouble is that there are enough of them to generate the tragedy of the commons. Hence, vaccination levels drop and measles rates rise.  …”

Measles, Vaccination, and the Tragedy of the Commons

Bad news for Canadians: No “conflict of interest” rule planned for Canada’s financial advisors

Conflict of Interest

Let’s boil this down quickly – if you’re a Canadian and you do what everyone else does with your savings and investments you will never get ahead. As I explain why let’s look at what is happening in the USA. The USA is moving to execute a fiduciary duty on its financial advisors that includes a “conflict of interest” rule. The “conflict of interest” referred to is the fact that any financial advisor that is not fee-only receives a commission on what they advise their clients to do. In Canada, this is most advisors encountered by Canadians.

As Barrie McKenna writes, commissions put enormous pressure on the advisor to make sales volume targets and even discovers that because of this “…[j]ust to break even, investors typically must generate annual returns of 5 to 8 per cent to cover fees, commissions, trading costs and inflation…” an estimate from Victor Therrien, a mutual fund industry veteran and former executive vice-president of Brandes Investment Partners.

On a similar “conflict of interest” rule move in Canada there is silence. Indeed David Di Paolo and Kara Beitel, partners of Borden Ladner Gervais LLP counsel against it saying “A blanket imposition of a fiduciary standard would ignore the realities of many advisor-client relationships.” In their article they almost completely ignore the “conflict of interest” elephant in the room.

Consumers Union, maker of Consumer Reports magazine, has been advocating for such a rule for some time and further educates us by explaining what a Fiduciary Rule means: http://www.consumerreports.org/money/what-the-heck-is-a-fiduciary/

If you don’t want to wait for this issue to resolve in the public good’s favor, I write about a simple method to grow your investments here: https://textor.ca/2016/08/avoiding-the-doomed-retirement-feeling-how-to-correct-your-investments-in-your-favor/

Are Pensions Merely Ponzi Schemes?

As one of thPonzi-scheme-1e Canada Post unions moves to disrupt the Canadian Postal system, I think now is a great time to discuss Defined Benefit (DB) Pensions which is the main issue for the union. Most private companies have moved to a Defined Contribution (DC) system; why? DB pensions are eerily similar to Ponzi schemes moving some to call DB pensions “legalized Ponzi schemes” (where the taxpayer bails out the “last in” pensioner and the company offering the DB pension goes into bankruptcy). FiduciaryNews.com published an enlightening article on Aug 28, 2014 that dives deeper into this question:

http://www.fiduciarynews.com/2014/08/are-pensions-merely-ponzi-schemes/

What do you think? Do you think it’s fair for a small group of people’s lifestyle to be funded by the Canadian Taxpayer?

I personally do not believe this is fair, and in 1999 when I was offered the choice between DB or DC pension (the last year DB was offered at the company I worked at), I chose a DC pension. In all honesty, I would rather no pension* as I have since learned of a way to not depend on any pension system which I talk about here:

https://textor.ca/2016/08/avoiding-the-doomed-retirement-feeling-how-to-correct-your-investments-in-your-favor/

This above mentioned method is both responsible to other people (tax payers) and has the upside benefit of enabling more money to people in retirement than an equivalent DB pension (assuming the person starts the strategy when they enter the workforce and let it run for 25+ years like a DB pension would do). The method has been stress tested by people who have lived on the poverty line and still were able to use the strategy successfully.

* Pensions in the truest sense are government legislated rules to force people to save for retirement; the underlying assumption is that people are not capable of being responsible for their own future. Therefore, the government needs to step in with rules so people don’t blow their own foot off and leave the government and other people with a huge liability as people age.