Misery index and happiness

The original misery index was developed by the economist A. Okun back in the 1960s. Okun, who is mostly known from his Okun’s Law on unemployment and GDP, defined the misery index as being the sum of the rate of unemployment and the rate of inflation for any given time. For instance, the latest misery index for the US is 6.13:

5 [unemployment rate] + (1.13) [inflation rate] = 6.13 [misery index]

The idea behind the misery index is to capture what hurts most the ordinary people: that is the unemployment and inflation. The interesting thing is that when governments try to reduce unemployment then the inflation can increase – so ideally they try to take balanced actions that will keep both of them relatively low.

Screenshot taken from miseryindex.us

The new challenges that economies face, however, are more related with things like the deficit and GDP. So, analysts at Moody’s proposed in 2009 a new version of the index that uses the unemployment rate and the fiscal deficit as a percent of the gross domestic product. According to Moody’s this new index better reflects the challenges that the major economies of the world expect to face over the next decade or so.

Taken from http://www.economix.blogs.nytimes.com/2009/12/15/a-new-misery-index

Spain makes it to the top of the list, while Ireland and Greece also have high positions.

But what makes us happy really?

Now, for the longest ever study on happines see the presentation by Robert Waldinger on TED.

And we’re constantly told to lean in to work, to push harder and achieve more. We’re given the impression that these are the things that we need to go after in order to have a good life. Pictures of entire lives, of the choices that people make and how those choices work out for them, those pictures are almost impossible to get.

They set up the Harvard Study of Adult Development and for 75 years they have tracked the lives of 724 men, asking about their worklife, life at home, and health.

The main result of the study is that good relationships make us happier and healthier.

Social connections are really good for us, and that loneliness kills. It turns out that people who are more socially connected to family, to friends, to community, are happier, they’re physically healthier, and they live longer than people who are less well connected.


It’s not just the number of friends you have, and it’s not whether or not you’re in a committed relationship, but it’s the quality of your close relationships that matters.


Good relationships don’t just protect our bodies, they protect our brains.


Michael Shermer on patterns and self-deception

Another excellent TED talk by Michael Shermer, founder and publisher of the Skeptic Magazine and author of “Why People Believe Weird Things” and “The Mind of the Market“. Shermer’s main argument is that…

Belief is natural. Disbelief, skepticism, science, is not natural. It’s more difficult. It’s uncomfortable to not believe things. So like Fox Mulder on “X-Files,” who wants to believe in UFOs? Well, we all do. And the reason for that is because we have a belief engine in our brains. Essentially, we are pattern-seeking primates.

Shermer explains why and how we impose patterns to things and how these patterns serve as a bias for new information – issues that are particularly important for cognitive and behavioral economics.

Distractions as an advantage

Distractions are generally viewed in a negative light especially on studies that deal with efficiency and effectiveness. However they can be beneficial in brainstorming and creative thinking.


The journal Neuropsychologia (Elsevier) published recently the paper “Flexible or leaky attention in creative people? Distinct patterns of attention for different types of creative thinking” by Zabelina, Beeman and Saporta. The authors found that individuals with higher creativity are also those who tend to be easier and more distracted.

…high creative achievement was related to quicker responses to the congruent than to the incongruent stimuli, suggesting that real-world creative achievement is indeed associated with leaky attention, whereas standard laboratory tests of divergent thinking are not.

Such findings agree with older research where distractions were considered beneficial and even necessary for out-of-the-box thinking. For example remember the Scientific American article from 2012, “The Inspiration Paradox: Your Best Creative Time Is Not When You Think“.

Insight problems involve thinking outside the box. This is where susceptibility to “distraction” can be of benefit. At off-peak times we are less focused, and may consider a broader range of information. This wider scope gives us access to more alternatives and diverse interpretations, thus fostering innovation and insight.

So the rule of thumb is this: when you need to brainstorm or think in a creative way then let distractions in, they will help you re-set and think the problem in a new light. In that case distractions work for you! So take a break, go for a walk, talk to a friend or play your banjo for a while. When you need to do analytical work then stay focused on the task at hand. Now it is the time to find ways to implement all those great ideas of yours!

A great article synthesizing the above discussion can be found on 99u.