The New York Times has an article on the psychology of happiness, looking at the relative effects of income, consumption levels and the value of experiences versus material goods - But Will It Make You Happy?. More ammunition for the 4 day working week...

A two-bedroom apartment. Two cars. Enough wedding china to serve two dozen people.

Yet Tammy Strobel wasn’t happy. Working as a project manager with an investment management firm in Davis, Calif., and making about $40,000 a year, she was, as she put it, caught in the “work-spend treadmill.”

So one day she stepped off.

Inspired by books and blog entries about living simply, Ms. Strobel and her husband, Logan Smith, both 31, began donating some of their belongings to charity. As the months passed, out went stacks of sweaters, shoes, books, pots and pans, even the television after a trial separation during which it was relegated to a closet. Eventually, they got rid of their cars, too. Emboldened by a Web site that challenges consumers to live with just 100 personal items, Ms. Strobel winnowed down her wardrobe and toiletries to precisely that number.

Her mother called her crazy.

Today, three years after Ms. Strobel and Mr. Smith began downsizing, they live in Portland, Ore., in a spare, 400-square-foot studio with a nice-sized kitchen. Mr. Smith is completing a doctorate in physiology; Ms. Strobel happily works from home as a Web designer and freelance writer. She owns four plates, three pairs of shoes and two pots. With Mr. Smith in his final weeks of school, Ms. Strobel’s income of about $24,000 a year covers their bills. They are still car-free but have bikes. One other thing they no longer have: $30,000 of debt.

Ms. Strobel’s mother is impressed. Now the couple have money to travel and to contribute to the education funds of nieces and nephews. And because their debt is paid off, Ms. Strobel works fewer hours, giving her time to be outdoors, and to volunteer, which she does about four hours a week for a nonprofit outreach program called Living Yoga.

“The idea that you need to go bigger to be happy is false,” she says. “I really believe that the acquisition of material goods doesn’t bring about happiness.”

While Ms. Strobel and her husband overhauled their spending habits before the recession, legions of other consumers have since had to reconsider their own lifestyles, bringing a major shift in the nation’s consumption patterns.

“We’re moving from a conspicuous consumption — which is ‘buy without regard’ — to a calculated consumption,” says Marshal Cohen, an analyst at the NPD Group, the retailing research and consulting firm.

Amid weak job and housing markets, consumers are saving more and spending less than they have in decades, and industry professionals expect that trend to continue. Consumers saved 6.4 percent of their after-tax income in June, according to a new government report. Before the recession, the rate was 1 to 2 percent for many years. In June, consumer spending and personal incomes were essentially flat compared with May, suggesting that the American economy, as dependent as it is on shoppers opening their wallets and purses, isn’t likely to rebound anytime soon.

On the bright side, the practices that consumers have adopted in response to the economic crisis ultimately could — as a raft of new research suggests — make them happier. New studies of consumption and happiness show, for instance, that people are happier when they spend money on experiences instead of material objects, when they relish what they plan to buy long before they buy it, and when they stop trying to outdo the Joneses.

If consumers end up sticking with their newfound spending habits, some tactics that retailers and marketers began deploying during the recession could become lasting business strategies. Among those strategies are proffering merchandise that makes being at home more entertaining and trying to make consumers feel special by giving them access to exclusive events and more personal customer service.

While the current round of stinginess may simply be a response to the economic downturn, some analysts say consumers may also be permanently adjusting their spending based on what they’ve discovered about what truly makes them happy or fulfilled.

“This actually is a topic that hasn’t been researched very much until recently,” says Elizabeth W. Dunn, an associate professor in the psychology department at the University of British Columbia, who is at the forefront of research on consumption and happiness. “There’s massive literature on income and happiness. It’s amazing how little there is on how to spend your money.”

CONSPICUOUS consumption has been an object of fascination going back at least as far as 1899, when the economist Thorstein Veblen published “The Theory of the Leisure Class,” a book that analyzed, in part, how people spent their money in order to demonstrate their social status.

And it’s been a truism for eons that extra cash always makes life a little easier. Studies over the last few decades have shown that money, up to a certain point, makes people happier because it lets them meet basic needs. The latest round of research is, for lack of a better term, all about emotional efficiency: how to reap the most happiness for your dollar.

So just where does happiness reside for consumers? Scholars and researchers haven’t determined whether Armani will put a bigger smile on your face than Dolce & Gabbana. But they have found that our types of purchases, their size and frequency, and even the timing of the spending all affect long-term happiness.

One major finding is that spending money for an experience — concert tickets, French lessons, sushi-rolling classes, a hotel room in Monaco — produces longer-lasting satisfaction than spending money on plain old stuff.

“ ‘It’s better to go on a vacation than buy a new couch’ is basically the idea,” says Professor Dunn, summing up research by two fellow psychologists, Leaf Van Boven and Thomas Gilovich. Her own take on the subject is in a paper she wrote with colleagues at Harvard and the University of Virginia: “If Money Doesn’t Make You Happy Then You Probably Aren’t Spending It Right.” (The Journal of Consumer Psychology plans to publish it in a coming issue.)

Thomas DeLeire, an associate professor of public affairs, population, health and economics at the University of Wisconsin in Madison, recently published research examining nine major categories of consumption. He discovered that the only category to be positively related to happiness was leisure: vacations, entertainment, sports and equipment like golf clubs and fishing poles.

The topic of population (revisited here recently with my post on Norman Borlaug) is the subject of a special in New Scientist on "The Population Delusion". One article notes that the problem isn't population growth (which has slowed dramatically, in spite of the wailing put up by population doomers), it is our consumption patterns - Population: Overconsumption is the real problem. The edition has a column for Paul and Anne Ehrlich, still concerned about populatiuon regardless - Enough of us now.

Now the demographic monster has become a hot topic again. Yet the arguments still don't fit the reality. The population "bomb" is fast being defused. Women across the poor world are having dramatically fewer babies than their mothers did - mostly out of choice, not compulsion. Half a century ago, the worldwide average for the number of children a woman had was between five and six. Now she has 2.6. In the face of such a fall it is hard to see what more "doing something" about global population might achieve.

Half the world now has a fertility rate below the replacement level, which, allowing for girls who don't make it to adulthood, is around 2.3. This includes most of Europe, east Asia, North America and the Caribbean. There are holdouts in a few Muslim countries - but not Iran, where fertility is 1.7 - and many parts of Africa. But rich or poor, socialist or capitalist, Muslim or Catholic, secular or devout, with tough government birth control policies or none, most countries tell the same story.

This hasn't yet stopped the world's population from rising. It stands at 6.8 billion, and is growing by 75 million a year. This is mostly because the huge numbers of young women born during the 20th-century's worldwide baby boom are still fertile: they may typically only have two children each, but that is still a lot of babies. Soon, however, if fertility rates continue to decline, each generation of women will be smaller than the last.

Of course fertility rates may not continue to decline, but to date the evidence of countries that have got down to the replacement level is that they don't stick there, they carry on declining. The reasons for this may have a lot to do with the changing position of women in society. Where men take a greater role in bringing up children, and the state intervenes to help working mothers, fertility rates stay quite close to replacement. Where they do not, then super-low fertility may follow; women, in effect, go on childbirth strike.

Even if the world population does stabilise soon and starts to glide downwards, that won't solve the world's environmental problems. The real issue is not overpopulation but overconsumption - mostly in rich countries that have long since given up adding substantial numbers to their population.

The key problem facing humanity... is how to bring a better quality of life for 8 billion or more people without wrecking the environment entirely in the attempt - E. O. Wilson

Take one measure: carbon dioxide emissions. Stephen Pacala, director of the Princeton Environmental Institute, calculates that the world's richest half billion people - that's about 7 per cent of the global population - are responsible for 50 per cent of the world's emissions. Meanwhile, the poorest 50 per cent are responsible for just 7 per cent of emissions. One American or European is more often than not responsible for more emissions than an entire village of Africans.

Every time those of us in the rich world talk about too many babies in Africa or India, we are denying our own culpability. It is the world's consumption patterns we need to fix, not its reproductive habits.

Ross Gittins is also talking about population growth (in a purely Australian context) in the SMH, noting that boosting GDP via immigration driven population increases misses the point - if GDP per person isn't growing, we are making citizen's (economic) lives worse, not better - Lets think twice about growth by immigration.

Over the past seven financial years, real GDP has grown by 23 per cent, but real GDP per person has grown by less than half that. So we haven't been doing as well as the headline growth figures imply.

You have to ask yourself what's so good about rapid population growth. And it's not good enough to say it makes the economy grow faster. From a narrow materialistic point of view, immigration-fed growth in the economy is good only if it raises the real average incomes of the pre-existing population.

And it's debatable whether it does. If it doesn't, we're running a high immigration policy mainly for the benefit of the immigrants, who are able to earn more in our country than in their own. Which is jolly decent of us.

Of course, if you were a business person, you wouldn't care whether high immigration led to a rise in income per person. All you're after is a bigger market because you believe it will allow you to make bigger profits.

So business believes in growth for growth's sake. Whether that attitude is shared by our politicians and economists, I'm less sure. Sometimes I think our economists are so mesmerised by Growth that they forget to inquire further.

But the other point that tends to be overlooked is that when you use immigration to force the pace of economic growth, it comes with a lot more costs attached than usual.

As the Treasury Secretary, Ken Henry, acknowledged last week, the expected continuation of high immigration raises strong questions about ''land-use sustainability and infrastructure requirements, both economic and social''.

Even so, these costs tend to be underplayed and hidden from view, partly because they're not acknowledged in our standard measure of growth, GDP. Indeed, some costs actually show up as additions to GDP. More growth - you beauty!

GDP ignores the cost of the environmental damage done by immigration. Apart from being morally dubious, poaching skilled workers from developing countries roughly doubles their greenhouse gas emissions, in the process making it all the harder for us to achieve the necessary reduction in our emissions.

So how come all those National Party and renegade Liberal politicians busy grossly exaggerating the economic cost of the emissions trading scheme have failed to mention the additional cost arising from the 6.5 million upward revision in projected population growth?

But the extra carbon emissions are just one of the environmental costs. A total projected population increase of 13 million over the next 40 years does raise the question of whether we'll exceed our ecosystem's carrying capacity.

Is the additional land use sustainable? Here's a country that badly stuffed up its river and underground water systems, and as we speak is demonstrating a serious lack of political will to fix the problem, telling itself an extra 13 million people will be no probs.

And what about the cost of all the roads, hospitals, schools, police stations and untold other infrastructure we'll need to build to accommodate a 65 per cent increase in the population? All that spending will add to growth as measured by GDP, but that doesn't mean it won't come at considerable cost to taxpayers.