Sunday, August 08, 2010

Recessions Brings Happiness? Yes, it has.

Today's New York Times reported that "amid weak job and housing markets, consumers are saving more and spending less than they have in decades, and industry professionals expect that trend to continue. Consumers saved 6.4 percent of their after-tax income in June, according to a new government report. Before the recession, the rate was 1 to 2 percent for many years. In June, consumer spending and personal incomes were essentially flat compared with May, suggesting that the American economy, as dependent as it is on shoppers opening their wallets and purses, isn’t likely to rebound anytime soon."

Bad news? For business, probably so. But for people, it might be the best thing that has happened to them in decades.

New research suggests that consuming less makes people happier. Studies of consumption and happiness show, for instance, that people are happier when they spend money on experiences instead of material objects, when they relish what they plan to buy long before they buy it, and when they stop trying to outdo their neighbors.

The question that remains is whether this is only temporary, and whether conspicuous consumption will raise its head again when (and if) the economy improves substantially. Or, is this a wake-up call, a forced lifestyle change for millions that will make them healthier and happier in the long term and result in a recognition that more never becomes enough?

Time will tell.


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