Lotteries and Life Satisfaction – A Comment on the Cardinal Treatment of Ordinal Variables

A long standing belief, held by many, is that winning the lottery actually makes people miserable. This belief is backed up by existing research in psychology finding that lottery winners were no more satisfied with their life than people who did not win the lottery. New research suggests this belief might be wrong.

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Book Review: “Nudge”

I recently finished reading a fascinating book entitled Nudge: Improving Decisions About Health, Wealth, and HappinessThe most basic idea behind the book is everything matters. Humans are constantly influenced unconsciously by seemingly trivial details. Put simply we are always being “nudged”. This book aims to harness the ways humans are nudged and use “choice architecture” in increase our quality of life.

The book begins by outlining some of the ways humans make decisions. Using insights from the growing field of behavioral economics, the authors explain how the vast majority of humans fail to follow the rules of rational choice theory in economics. Understanding these insights is paramount to understanding how humans make decisions and how to help humans make better decisions. (If these details sound interesting to you, read the book or take a microeconomics class, I am not going to take the time to outline them here.)

I will jump to some of the unique ideas proposed in this book about how to solve some of our world’s most complex and pressing challenges. As you will see choice architecture, seems to introduce interesting and innovative ideas for families, business people, and policy makers to consider.

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