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Luxury Fever

Why Money fails To Satisfy In An Era Of Excess

Robert Frank

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Winner Take All markets have proliferated bc tech has greatly extended the reach and power of most gifted performers. 100 years ago most cities had opera houses hwere thousands of tenors earned a modest living performing to local audiences. But recorded music educated audiences to the standard of the very best, and now, most are prepared to pay bit more to hear Pavarotti rather than the marginally less talented or well known singers. So P earns millions a year, while rest struggle to get by.

People who describe themselves as happy are able to rem more positive evnts and fewer neg ones from recent experience. Unhappy people not only the reverse, but more likely to have other symptoms such as headaches and digestive disorders.

People rapidly adapt to new situations. Almost everyone says they'd rather be killed in accident than rendered paraplegic, but in fact quads get back to same mix of moods and attitudes they had before accident.

It's unpredictable stress that is most damaging. In expts, people exposed to loud, intermittent, unpredictable noises showed both physiological stress and behavioural symptoms - elevated blood pressure and lowered scores on tests requiring attention.

Control is impt. Two groups listened to sounds on a tape. One group was told they cd stop the tape if wanted to, but that experimenters wd prefer them to listen to the end. Most did listen to end, and the group with control performed significantly better.

Lot of evidence that longer distance commutes are unhealthy - pollution and crash risk while driving, and then get home tired an irritable, so destabilises marriage and family relationships. And yet most people choose the bigger house that requires longer commute.

Similarly, numerous studies document positive mental and physiological benefits of regular aerobic exercise. But many people are so averse to exercise that they will pay to avoid it. Claim that lack time to exercise, but that is just that don't prioritise it ahead of overwork and TV.

And, studies show that having strong family and friends bonds correlates with better mental and physical health. Having good friends you can confide in when under pressure, and when recovering from medical treatment. But relationships take time to build, and time is money, so many people invest in building fortune rather than relationships.

The pain of losing $1000 is far greater than the joy of gaining $1000. People will put far more effort into avoiding loss than to gaining.

Karl Marx: a house may be large or small, as long as the surrounding houses are equal size. But if a palace arises beside the little house, it becomes a hut.

Context is crucial: put people in a 500 sq ft house and it will seem small, but if on a yacht with 500 sq ft living space, it will seem luxurious.

People's assessment of own lives goes up if a disabled person in room.

Behaviour biased in favour of the immediate - 'salted nut syndrome' - we keep snacking until bowl is empty even though know it will spoil our appetite for coming meal. Addicts tempted by short term immediate hit even though know long term costs. But can actually reduce alcoholics drinking by making them perform small task before they take bottle.

Bill Gates built a 45,000 sq ft mansion in Seattle, but if he moved to NY, he wouldn't build that size, even though he cd afford to. Wealthiest people in LA have 15,000 sq ft homes; people with same amount of money in NY have 5000 sq ft home. A CEO needs a 15,000 sq ft mansion only bc others have that size. To have a lesser house wd raise questions about health of his business.

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