1. Is optimism bias a good thing, when all else fails, should we lower our standards to be happy?
2. Some people argue that happiness scores, since they are subjective, it has no meanings, some argue that it is not comparable across people and the others are argue that people redefine happiness scores over time. How would you respond these arguments, would they likely to explain Easterlin Paradox?
3. Gruber et al. (2002) showed that tax on cigarette make the smokers as happy as non-smokers. According to rational economic theory, this can not be possible- if prices of goods that you enjoy increase, your utility should decrease. How would you explain the irony?
4. Would providing permanent unemployment benefit increase the happiness of unemployed people permanently? Explain.
5. What would make people more miserable, increase in inflation rate or increase in unemployment rate? Would your answer change if you are democrat or republican?
6. Michigan has highest unemployment rate 5.7% whereas Utah has the lowest 1.9%. According to research article discussed in class, if you will become unemployed soon, where would you rather to leave for your happiness?
7. How is the equality effect happiness? How did they measure it and what did they find?
8. How does the quality of governance or democracy affect national happiness level?

Use the articles below in your answer indicate which article used to answer and page number

Weinstein, N. D. (1980). Unrealistic optimism about future life events. Journal of Personality and Social Psychology, 39(5), 806-820. https://doi.org/10.1037/0022-3514.39.5.806

Frey, Bruno S. and Stutzer, Alois, What Can Economists Learn from Happiness Research? (June 2001). Available at SSRN: https://ssrn.com/abstract=271816 or http://dx.doi.org/10.2139/ssrn.271816

Rafael Di Tella & Robert MacCulloch, 2006. "Some Uses of Happiness Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 25-46, Winter.

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Optimism Bias and Happiness Optimism bias can be both a good and a bad thing depending on the context While it can provide individuals with a positive outlook and resilience in the face of adversity i... View the full answer