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Using money to buy time is the way to true happiness, research suggests

Jonny Clark

31st July 2017

Wage determination and labour economics may be a topic taught early on in the academic year, so I was struck by this recent report highlighting how money can bring happiness - as long as it is used to 'purchase time'.

This article from the Telegraph highlights a report conducted by Dr Elizabeth Dunn from the University of British Columbia. The research suggests that earning higher wages can bring a level of happiness as long as it is used to purchase leisure time - i.e. used to buy in services to support cleaning and household maintenance so as to free up time for the individual.

This research helps support, to some degree, some of the standard theories of wage demands and the supply of labour by the individual. Traditional theories about a backward sloping supply curve for labour (I appreciate that this is not a necessary element of all of the A level specifications any longer) suggests that as wages for an individual increase there becomes a point where that person will start to supply less labour as they are earning sufficient to pay for the quality of leisure time that they would like to have and, in fact, wish to spend more time relaxing and enjoying themselves.

This short clip gives a little insight in Dr Dunn's work.

Jonny Clark

Jon Clark has been teaching economics and business studies for over 25 years primarily in the Further Education sector. Before joining tutor2u, he was a senior manager at South Cheshire College in Crewe.

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