Archive for January 15th, 2008

Politicians who swear U.S. citizens will be happier if they just lowered taxes may want to give the people of Denmark a second look.

Based on world-wide surveys, the Danes typically rank the highest in happiness. And yet, they pay some of the highest taxes in the world — anywhere between 50 and 70 percent.

How can that be?

One possible reason — the government covers all health care and education, and it spends more on children and the elderly than any country in the world per capita. The citizens also say their system is efficient for its small population (5.5 million people).

But there may be another reason, according to this article. Since a banker can end up taking home as much money as an artist, people don’t chose careers based on income or status. Some Danes call it ‘Jante-lov,’ which translates roughly into “You’re no better then anybody else.” In other words, garbage collectors are just as valued as doctors or lawyers.

Another possible explanation for their happiness — Danes are very social. About 90 percent of them belong to some social club, many of which are paid for by the government. Shopping and consuming also is not a top priority. Along with less emphasis on “stuff” and a strong social fabric, the Danes also have a very high level of trust in each other and in their government.

All the necessary ingredients for a healthy, happy population.

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It turns out pleasure comes in a bottle — albeit an expensive one.

That’s what researchers discovered recently when they tested the neural activity of study participants after showing them expensive and inexpensive wines.

The results showed increased brain activity in the the medial orbitofrontal cortex — an area of the brain believed to encode pleasure related to taste, odors and music — when participants tasted “pricey” wines. They also found that inflating the price of a bottle of wine enhanced a person’s experience of drinking it, based on the corresponding neural activity.

But here’s the interesting part.

It was a blind taste test. Participants never knew the quality of the wine. They were just told the price. In fact, researchers presented two of the wines twice, once with the true price tag, and again with a fake one. They also passed off a $90 bottle of wine for one they said was $10 and showed a $5 dollar bottle as one costing $45.

Researchers say that their study demonstrates how subjective beliefs come into play with respect to the quality of an experience.

“If you believe that the experience is better, even though it’s the same wine, the rewards center of the brain encodes it as feeling better,” said Antonio Rangel, associate professor of economics at the California Institute of Technology and lead researcher.

Marketers have known this for years. This just confirms it.

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