Faculty & Research

Money Can't Buy Happiness

People with greater income tend to devote more time to work, community and activities such as shopping and child care.

The more money you earn, the more time you are likely to spend working, commuting and doing other compulsory activities that bring little pleasure, according to new research by marketing professor Norbert Schwarz.

Schwarz and colleagues analyzed the link between money and happiness in an article that appeared in the June 30 issue of Science. They present new evidence showing that what they call "the focusing illusion" affects how people respond when asked how happy or how satisfied they are with their lives.

"When people consider the impact of any single factor on their well-being—not only income—they are prone to exaggerate its importance," said Schwarz.

The researchers reviewed several possible reasons why income has a weak effect on happiness, including their own explanation—as income rises, people's time use does not appear to shift toward activities associated with improved affect. More...

Firms with Hard-to-Read Annual Reports Have Lower Earnings

There's a reason why some annual reports are difficult to read—they're hiding something.

A new study by Feng Li, assistant professor of accounting, shows that annual reports of firms with lower earnings are harder to read.

"Consistent with the motivation behind the plain English disclosure regulation of the Securities and Exchange Commission, managers may be opportunistically choosing the readability of annual reports to hide adverse information from investors," Li said. "Firms with lower earnings not only tend to file annual reports that are more difficult to read, but a decrease in earnings from the previous year also results in annual reports that are harder to read, compared with the previous year's reports." More...


Playing Dating Games with Stock Options

Managers not only backdate, but forward-date, as well, say finance professors M.P. Narayanan and H. Nejat Seyhun

While the fallout from corporate accounting scandals has curtailed backdating of stock options, it is still prevalent. In fact, executives also influence their compensation by engaging in another kind of dating game—forward-dating.

When backdating, executives report to the Securities and Exchange Commission that they received options from their corporate board on a date prior to the actual time the board decision was made—if the stock price was rising before the board decision date. More...

For more faculty research articles, please visit the News Room.

For more information on faculty and research, please contact the Office of Marketing Communications.


Ross welcomes new faculty members Lou Mulligan (Business Law), Ozge Sahin (Operations and Management Science), Jim Westphal (Strategy), Owen Wu (Operations and Management Science), Lu Zhang (Finance) and Minyuan Zhao (Strategy).

Dave Ulrich Tops List of Most Influential Leaders in Human Resources.

Students Honor Top Teachers - Five Ross School faculty tapped for Teaching Excellence Awards.

Ross School Honors Faculty - Six cited for research, teaching and service.

Hosmer Luncheon Schedule