behavior · happiness · mental health

How Optimism Affects the Economy | LearnVest

find your happy place
Image by emilychang via Flickr

Seattle is known for its gray skies, and perhaps stand-offish attitude to new comers, but I’d argue we are a surprisingly optimistic metropolis. In fact, we’re number four on a Gallup poll’s list of happy major cities. It turns out this is also a good thing for our local economy.

According to new research… the happier you are, the quicker the area you call home is likely to recover. In other words, it’s not just the economy that affects ours moods—it might actually work the other way around, too.

A recent study by the University of Miami School of Business Administration has shown that in in states where people are more optimistic, an economic recession is weaker, expansion is stronger and recovery faster.

Alok Kumar, one of the study’s researchers and a finance professor at the University of Miami School of Business, measured optimism levels across different U.S. states by looking at three key factors: weather, sports optimism and political optimism. In other words,  warm, sunny weather encourages the release of serotonin in the brain, which makes people alert and cheerful. Additionally, we’re happier when the political party we like is in power and our sports teams are performing well.

After creating an index to measure economic well-being in those same places, the researchers crunched the numbers to reveal the correlation between mood and economic activity. Overall, they found that happier places had higher retail sales, which improves the economic climate and helps lessen the effects of a recession. The results of the study showed that other non-economic factors—like warm weather and good sports teams, which improve happiness and optimism—also helped improve local economy, meaning that your mood (and the mood of your town’s fellow residents) can directly impact your area’s economic outlook.

read more about the study via Find Your Happy Place: How Optimism Affects the Economy | Living Frugally | Psychology Of Money | LearnVest – Where life gets richer, and check out their recommendations for happiest large, medium, and small cities.