Fact-checking Jarvis Cocker's Claims About Economics

It's probably no coincidence that the Britpop band that scored their biggest hit with a meticulous investigation of the British class system, is back in 2025 talking about economics. Thirty years after Common People (and 24 since their last album) Pulp have just released a new record, More. The final track on the album, A Sunset, is a sweet, and maybe ironic, little ditty about the value of enjoying nature and contains the following lines:

The first rule of economics:
Unhappy people, they spend more

But is this actually true? Let's fact-check singer Jarvis Cocker.

The statement makes two claims: that unhappy people spend more and that this is the first rule of economics.

Let me quickly disprove the latter. I've been teaching various first-year economics modules for decades and have used a number of different introduction level textbooks over the years and I have never come across the idea that unhappy people spend more.

Additionally, every now and then there are surveys held under professional economists to see what the most important ideas within the field are and it is usually the concept of oppurtunity costs - the idea that all choices involve some kind of trade-off - that ends up number one. The graph below is from one such study from a couple of years ago. Opportunity cost is again considered the most important economic idea. The relationship between unhappiness and spending isn't mentioned.

That leaves the empirical issue: do unhappy people spend more? I find the question a bit strange because normally, as economists, we would see happiness as the result of a particular decision and we treat it as an outcome variable, something to be explained. We usually assume that the economic decision-makers in our models go around trying to maximize their utility. This is a bit of a vague concept but it's not hard to imagine that at least part of it is something normal people might call happiness. Our usual assumption is that if you consume more, you obtain a higher utility and, as such, are happier.

But the lyrics of the song turn it around, (un)happiness is the explanatory variable here. Although he doesn't really explain his claim any further I think Cocker's (2025) intuition is that unhappy people spend more in order to try and increase their happiness. This isn't particularly my area of expertise but I did find a handful of papers that use a number of different data sets to try and tackle the question. The results are, as we say, mixed.

Guven (2012) uses data from the Dutch Household Survey and finds that happier people are likely to save more and spend less. It's actually quite a remarkable paper because as far as I understand it, it is especially interested in the role of sunshine on happiness (and economic behaviour). Surprise, surprise, sunshine does make us happier. Back to the main question, Zhu, Ma, Leng & Nie (2020) use data from something called the China Labor-force Dynamics Survey which focuses especially on rural Chinese households and find that higher levels of happiness are associated with higher consumption expenditure. Happy people actually spend more.

For some reason there are multiple studies investigating the question under older people (maybe that's just because they are more likely to answer surveys...). Dominko and Verbic (2022) look at people 50 and over using data from the English Longitudinal Study of Aging and break consumption behaviour down in different categories. They find that "subjective well-being" (they mean 'happiness') "positively affects spending on food outside of home and leisure activities, while having no significant effect on the consumption of food consumed at home, clothing, monthly rent, and utilities." Asebedo, Wilmarth, Seay, Archuleta, Brase and MacDonald (2018) look at U.S. preretirees aged 50–70 using data from the Health and Retirement Study and conclude that "increased positive affect and reduced negative affect" (again, they mean 'more happiness' and 'less unhapiness' respectively) is correlated with higher saving (and, as such, lower consumpition). Two more pieces of evidence that suggest it is actually the happier people that spend more.

Finally, Kenny (2007) takes a big picture view and looks at the relationship between happiness and economic growth (which is related to consumption. Broadly, if we consume more, our economy is also bigger) and finds weak statistical evidence that an increase in the first leads to more of the latter.

(Technical aside: probably the first rule of economic data analysis is that correlation doesn't mean causation. That's especially relevant here. We've already seen that there is also an economic relationship that says that people who spend more, who buy more stuff, are happier. If we would simply look at the correlation between happiness and spending level, we can't say which causes which. Whether it is that we're happier because we spend more or we spend more because we're happier. As far as I can tell all the studies covered above use some sort of fancy econometric technique that allows them to say something about the direction. Kenny (2007), for instance, looks at both directions. They find no effect of economic growth on happiness and, as said, a small effect of happines on economic growth).

(Non-technical aside: at some point a rumour went round the internet that the girl who is the main character in Common People, who is 'from Greece and (...) studies sculpture at St Martin's College' is currently the wife of famous Greek economist and left-wing politician Yanis Varoufakis, Danae Stratou. Who is indeed from Greece and studied at what is now Central Saint Martins when the events in the song are supposed to be taking place (and came from a rich family). I thought this rumour was debunked but Wikipedia is still on the fence on the issue).

So, with the exception of the very first study mentioned, Guven (2012), all the other empirical evidence suggests that there is actually a positive relationship between happiness and consumer spending. There is probably some variation when you separate different types of consumption and different groups of consumers, but the general gist of it seems to be that Jarvis Cocker was wrong when he claimed that unhappy people spend more, quite the opposite actually. It is certainly not the 'first rule of economics'...

(Source of the picture at the top)