How to spend your money, according to science

It's not the act of buying but how you spend money that improves happiness and life satisfaction.

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  • To prove money can't buy happiness, people point to millionaires and lottery winners who ruined their lives.
  • Psychological studies have shown that learning how to spend your money can improve overall happiness.
  • We explore eight money-spending principles that research suggests can bolster life satisfaction.
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Gamblers predicted Brexit before traders or experts

Need to know how an election will turn out? Call your bookie.

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  • A new study finds that gamblers reacted more quickly to news on Brexit than currency traders.
  • On the night of the referendum, gamblers and odds makers figured out what would happen hours before traders, experts, and the BBC.
  • The results are bad news for the idea that markets are perfectly efficient.
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Why natural disasters make men take more risks

Looking at the 2011 earthquake in Japan, researchers found that natural disasters make men — but not women — more fond of taking risks.

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  • The 2011 earthquake in Japan was among the most intense earthquakes to occur in recorded history.
  • Thanks to regularly distributed surveys, however, it also became a unique research opportunity to compare civilians' behaviors from before the earthquake with their behavior after.
  • Now, researchers have found data that suggests being exposed to a natural disaster tends to make men more prone to engage in risky behavior, like gambling and drinking, over the long term.
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Does winning the lottery ruin your life? Not usually, study shows.

A study from May 2018 found that most lottery winners report greater life satisfaction over a long-term period.

Balbir Atwal, owner of the California 7-Eleven that sold one of the 3 Powerball winning tickets, holds up a $1 million check. (Photo by Ringo Chiu/Getty Images)
  • The study asked more than 3,000 lottery winners about their mental health, happiness and life satisfaction years after winning big cash prizes.
  • Most winners reported greater life satisfaction, but less significant changes in mental health and happiness.
  • The recent Mega Millions and Powerball jackpots could be different, however, given the sheer size of the prizes.
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Libertarian Paternalism: Eat Well, Retire Rich, and Feel the Freedom

Here's how the government improves your life without you knowing it.

One of the best policies in America might just have the worst name: libertarian paternalism. Fortunately it's better known as 'nudge theory', and it has saved billions of dollars, huge numbers of lives, and subtly increased the nation's standard of living. How does it do all that? Harvard Law School professor Cass Sunstein explains that libertarian paternalism uses tested behavioral science to present people with choices that could improve their lives. It's why your credit card statement has clear information about how to avoid interest charges, it's why savings plans are opt-out rather than opt-in, and it's why 11 million U.S. kids below the poverty line get free school meals without even having to ask. These nudges and automatic enrollments give Americans all the help, with none of the treading on me (hence the 'libertarian' paternalism). They are, as Sunstein explains, liberty preserving and perhaps best of all, considering the current political climate, nudge theory is met with bipartisan enthusiasm. Cass Sunstein’s research is cited in The Influential Mind: What the Brain Reveals about Our Power to Change Others byTali Sharot.

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