Tag Archives: Economics 101

Nirvana 2.0: Happiness is Equal to Consumption Divided by Desire

If you have ever taken Economics 101, you’ll know that happiness is equal to consumption divided by desire.

Even otherwise, most of us understand this equation intuitively and, therefore, equate buying things with buying (the promise of) happiness.

However, I have been asking myself for a while if consumption itself follows the ‘bigger is better’ rule, if an increase in consumption results in an increase in happiness (tweet).

If you have ever maxed out your credit card buying the most recently fashionable clothes, gadgets, accessories or (insert your addiction here) you didn’t need, you’ll also know that consumption rarely satisfies desire.

In fact, instead of satisfying desire (consumption increases, desires decreases, happiness increases), consumption often fuels the desire to consume more (consumption increases, desires increases more, happiness decreases).

Once you have everything you need (want), buying (consuming) more of everything rarely results in more happiness. It results in ennui, which doesn’t quite taste like happiness, when I last checked.

So, if happiness is equal to consumption divided by desire, does the key to happiness lie in increasing consumption or decreasing desire (tweet)?