Psychology Today Blogs - plus2sd

Money and Happiness - The Debate that Won't Go Away

Gregory S. Berns — Wed, 16 Apr 2008 06:57:12 -0700

On the front page of the business section of the New York Times today, David Leonhardt reports on a recent study about the relationship of money and happiness. Personally, I love this debate. The “can money buy happiness” question seems to stick around as long as the nature versus nurture question. The article is about a new analysis by Betsey Stevenson and Justin Wolfers on the relationship of per capita GDP and average life satisfaction for most of the countries in the world. Unlike previous analyses, Stevenson and Wolfers find that there is, indeed, a positive relationship between per capita GDP and life satisfaction. This finding seems to rebut the famous Easterlin paradox of the '70s that suggested no such relationship.

So what's really going on? A closer examination of the data shows that even though there is a weak correlation between money and happiness, there is still a lot of variability from one country to another. Take a per capita GDP of $8,000, and you see that Brazilians are twice as happy as Bulgarians, both of which have this average level of income. There must be other factors in addition to money that account for happiness.

But one thing that money does do that seems to never make it into these discussions is the ability to buy options. Money gives you choices, even if you don’t act on them. And that is a comforting position to be in. It's not the material goods and services that money buys that seems to make people happy. Instead, it's the ability of money to buffer one against the misfortunes of life and to create opportunities to do new and different things. As I alluded to in a previous post, hope drives people's decisions – specifically the hope that the future will be better than the present -- and money in the bank is a good hedge against the future. Paradoxically, credit cards do the same thing by borrowing against the future. I wonder what the happiness graph would like if it were plotted against per capita debt.

The Technology of Mind Reading

Gregory S. Berns — Fri, 21 Mar 2008 09:42:58 -0700

I read a fascinating fMRI study published in the 20 March 2008 issue of Nature. The study is titled, "Identifying natural images from human brain activity" and was performed by a group at UC Berkeley. While in the scanner, subjects were shown a series of natural scenes, like the one shown here.

Seems fairly simple. Using fMRI, the investigators acquired a template response from each subject's visual cortex and then used this template to "decode" the brain's response to novel images.

Without going into the details of how they did this, in one subject the technique correctly identified 110 out of 120 images (92%) that the individual was viewing.

Think about this. Simply by scanning the visual cortex of an individual with fMRI and using a fairly straightforward computer algorithm, the investigators were able to determine with a high degree of accuracy what the person was looking at. This is about as close to mind-reading as it gets.

Of course, there are a few caveats. The way the experiment was setup meant that the algorithm simply had to take the brain activity and pick from a known set of images which one matched best. This is not quite the same as taking brain activity and reconstructing, de novo, what the person was seeing. But it is the first step. Surely with a large enough library of images this could be done.

What intrigues me even more is the possibility of using this technique in the absence of visual stimulation. Much of what we know about imagination suggests that mental imagery utilizes the same brain machinery as visual perception, so it might be possible to use this technique to decode thought in the absence of stimulation.

Bear Stearns and the Biology of Hope: Part I

Gregory S. Berns — Mon, 17 Mar 2008 07:24:21 -0700

Working throughout the weekend, the Fed helped broker a deal to bail out Bear Stearns. On the verge of bankruptcy, Bear Stearns will be acquired by J.P. Morgan for the bargain basement price of $270 million. Clearly, the Fed was hoping to stanch the hemorrhaging on Wall Street. But it had already rendered its judgment on Bear Stearns last Friday when its market value collapsed.

While the Fed's policy is surely well-intentioned, it is not likely to have the desired effect. The Bear Stearns saga highlights an important, but not always appreciated, fact about how we place value on things. Value is a quality that we assign to something based on what we think the future holds. We buy a stock not so much for what has happened in the past but for what we expect the company to do in the future. So when the market for Bear Stearns collapsed on Friday, it was a collective signal that effectively said, "Abandon hope!"

Hope is what gets us out of bed every morning. It is what impels people to toil in jobs that they would otherwise rather not do. It compels others to buy lottery tickets, and hope even makes us have children. All for the belief that things will be better in the future.

Hope, not the Fed, is the engine of the economy.

Unfortunately, the Fed's move doesn't go nearly far enough in restoring hope that the economy will improve in the near future. It smacks of desperation more than anything else.

So where does hope come from? The sources are varied, but as a neuroscientist, I believe that the final common pathway is through dopamine released in the brain. Until the early 1990s, the prevailing view of dopamine was that it was a neurotransmitter of pleasure. The research, both in monkeys and humans, has subsequently shown that dopamine is released well in advance of pleasure. In fact, dopamine seems to function primarily as a chemical of anticipation -- anticipation that something good will happen. When dopamine is released, it sets up the brain to do something, kind of like a fuel injector for action. Without dopamine, the person retreats into a state of inertia. Think Parkinson's disease.

So, the Fed's move, rather than stimulating the market, may have the opposite effect and grind it to a halt.

I hope not.