Sunday, June 5, 2016

The habits, values, behaviors and actions that create wealth are what lead to good life outcomes.

That's interesting information. From Wealth, Health, and Child Development: Evidence from Administrative Data on Swedish Lottery Players by David Cesarini, Erik Lindqvist, Robert Östling and Björn Wallace. A very clever use of a natural experiment created by participation in national lotteries. From the abstract.
We use administrative data on Swedish lottery players to estimate the causal impact of substantial wealth shocks on players’ own health and their children’s health and developmental outcomes. Our estimation sample is large, virtually free of attrition, and allows us to control for the factors conditional on which the prizes were randomly assigned. In adults, we find no evidence that wealth impacts mortality or health care utilization, with the possible exception of a small reduction in the consumption of mental health drugs. Our estimates allow us to rule out effects on 10-year mortality one sixth as large as the cross-sectional wealth-mortality gradient. In our intergenerational analyses, we find that wealth increases children’s health care utilization in the years following the lottery and may also reduce obesity risk. The effects on most other child outcomes, including drug consumption, scholastic performance, and skills, can usually be bounded to a tight interval around zero. Overall, our findings suggest that in affluent countries with extensive social safety nets, causal effects of wealth are not a major source of the wealth-mortality gradients, nor of the observed relationships between child developmental outcomes and household income.
Wealth does not create good life outcomes. The habits, values, behaviors and actions that create wealth are what lead to good life outcomes.

This is common cultural knowledge but inimicable to the core Marxist assumptions of all totalitarians which is that good outcomes in the world as we know it are strictly the result of luck.

This Swedish research goes to Reynold's Law.
The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them.
More succinctly, "Subsidizing the markers of status doesn’t produce the character traits that result in that status; it undermines them." Wealth doesn't produce the desired outcomes, the behaviors that produce wealth also produce other desired outcomes.

Charles Murray also highlighted this idea in his findings from Coming Apart, particularly in his Third Law. The three laws he derived from that study were:
Law 1: The Law of Imperfect Selection
Any objective rule that defines eligibility for a social transfer program will irrationally exclude some persons.
Law 2: The Law of Unintended Rewards
Any social transfer increases the net value of being in the condition that prompted the transfer.
Law 3: The Law of Net Harm
The less likely it is that the unwanted behavior will change voluntarily, the more likely it is that a program to induce change will cause net harm.

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