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Money can buy happiness

economist.com

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Re: Money can buy happiness

#61

Post by pyduan »

auctiontheory wrote: post #60
rm999 wrote: post #26

Earlier quoted context omitted.

>I don't really see how this new data contradicts the generally accepted view (mentioned in the article) that money increases happiness up to a point. The article shows a logarithmic trend (i.e. doubling your income increases your happiness by a fixed amount), which is a straight line on the log plot. This insinuates ( if the trend continues, which is assumed from the results) that there is no point at which increase…

a 5% raise to someone making 1M dollars a year is about as significant to his life as a 5% raise for someone making 100k Are you asserting that as fact? Where I live, someone making 100K is just getting by and not saving very much, even with the 5% raise (he certainly couldn't buy a house), whereas for someone making 1M, the extra $50K is "free" money.

This is precisely what Easterlin says: a relative increase in income has little effect on happiness past a certain point. This competing model (the one in the article) says that no, there is no saturation point and there is a logarithmic relationship between income and happiness where the effect of a %age change in income has a constant effect on happiness.

Re: Money can buy happiness

#62

Post by tspike »

thatthatis wrote: post #53
robg wrote: post #20

Earlier quoted context omitted.

Re-phrased: Would you rather make $100k in San Francisco, Pittsburgh, Miami, or Havana?

You could buy half of Havana on an income like that.

...but you could barely buy a car: http://www.npr.org/blogs/parallels/2014/01/09/261111796/cuba...

Re: Money can buy happiness

#63

Post by escape_goat »

rm999 wrote: post #26
leoedin wrote: post #3

The income scale is logarithmic, so the apparently linear lines that you see are actually curved. The returns in happiness per $ earned fall off significantly towards the top of the scale (which incidentally is capped at a fairly low $128,000). I don't really see how this new data contradicts the generally accepted view (mentioned in the article) that money increases happiness up to a point.

>I don't really see how this new data contradicts the generally accepted view (mentioned in the article) that money increases happiness up to a point. The article shows a logarithmic trend (i.e. doubling your income increases your happiness by a fixed amount), which is a straight line on the log plot. This insinuates ( if the trend continues, which is assumed from the results) that there is no point at which increase…

I can see where you're coming from, but I also see two problems.

Firstly, you're generalizing towards the origin from a relatively high section of the graph. Leaving aside the relative happiness, a 5% increase in income is actually much more significant in someone's life when they make $10,000 a year than when they make $100,000. There are thresholds established by absolute resource requirements. This makes it dangerous to reason from the 'flat' part of the curve downwards. Relevant analogy: transistor response curve.

Secondly, insofar as income represents a portion of an absolute resource [ie to some extent], some information is obscured that would otherwise be intuitively and immediately available. It's remarkable that the money required to increase a person's happiness by one unit is, in every case, enough money that another person could share their initial happiness. A graph with a linear relation would demonstrate this as an (immediately obvious) diminishing return on a finite resource. A graph with a log relation presents a diminishing return as natural and efficient. In this way, the choice of scaling method significantly biases the meaning attributed to the data.

Re: Money can buy happiness

#64

Post by auctiontheory »

danielharan wrote: post #6

The richest in India are less happy than Brazil's poorest. But leave it to the economist to find that money makes you happy while ignoring that some countries seem much happier. If you were to pick a country where you could randomly end up anywhere on the income scale, which would you pick? Of the countries listed, I'd pick the United States, followed by Brazil, Britain and Mexico.

US? Mexico?! Ignoring the graph, you want to end up in a company with strong social services and wealth redistribution - Norway or somewhere similar. The US is not the best place to be poor.

It also depends who "you" are. Are you black? A woman? Gay? Other countries may have a relative advantage over the US.

Re: Money can buy happiness

#65

Post by oscargrouch »

Aqueous wrote: post #2

This seems obvious. Having no money is very stressful. Stress not only makes you generally very unhappy - it actually damages your brain ( http://www.ncbi.nlm.nih.gov/pubmed/15511597 ). Stress is an unhealthy thing to experience, especially when it is constant and your mind and body do not have time to recover. In small doses, a little stress keeps you moving, but its benefits drop off pretty quickly the more stress…

There are communities that doesnt even have a economy based on money, and are pretty happy.. there are indigenous people in reserves here and brazil and also some remote parts of africa that i know of.. (i imagine theres even more samples)

If you start to look to them, they have a pretty smart way to achieve happyness without money.. they are very collective types in nature.. and not individualistic as we do.. the nature gives them everything they might need.. they dont have the same views on posession as we do.. like indians in brazil sleep in big open houses(ocas) with a little community in each one.. they even have rituals to exchange sexual partners (they do not possess each other like we do with engagements or marriage)..

So their reality are pretty different from our own.. and the white man doom their type of civilization, with the concept of money, properties, and greed basically..

So the lack of money is only stressful for people who need to care about money..

Re: Money can buy happiness

#66

Post by joshmlewis »

DavidWoof wrote: post #51
amiune wrote: post #5

Earlier quoted context omitted.

I guess you mean: "Would you rather earn $800,000 and live in a neighbourhood of those earning $1,000,000, or would you rather earn $100,000 and live in a neighbourhood of those earning $80,000."

Maybe I'm missing something, but I don't see either this or the original even remotely as a difficult question. Making 80% of the median income is completely within normal ranges; it seems to me it would be barely noticeable in both cases. On the other hand, the difference between US$100,000 and US$800,000 is gigantic, it's a complete change in lifestyle and security. Seriously, does anyone here actually find either…

No I agree with you. From what I've seen most families income could fluctuate that much between husband/wife work situations. Pay cuts, or bonuses, etc.

Re: Money can buy happiness

#67

Post by pyduan »

ritchiea wrote: post #47
rm999 wrote: post #26

Earlier quoted context omitted.

>I don't really see how this new data contradicts the generally accepted view (mentioned in the article) that money increases happiness up to a point. The article shows a logarithmic trend (i.e. doubling your income increases your happiness by a fixed amount), which is a straight line on the log plot. This insinuates ( if the trend continues, which is assumed from the results) that there is no point at which increase…

The data I've seen shows the income where happiness flattens is around 100k rather than 70k so cutting off at 128k doesn't seem high enough to disprove the established research.

Remember that both Easterlin's studies and the one in this article have been done in many countries and not just the US though. The $128k cap may seem limiting for the US but it is not for Nigeria or the other lower-income countries, yet they still show the same patterns.

Re: Money can buy happiness

#68

Post by zanny »

pyduan wrote: post #61
auctiontheory wrote: post #60

Earlier quoted context omitted.

a 5% raise to someone making 1M dollars a year is about as significant to his life as a 5% raise for someone making 100k Are you asserting that as fact? Where I live, someone making 100K is just getting by and not saving very much, even with the 5% raise (he certainly couldn't buy a house), whereas for someone making 1M, the extra $50K is "free" money.

This is precisely what Easterlin says: a relative increase in income has little effect on happiness past a certain point. This competing model (the one in the article) says that no, there is no saturation point and there is a logarithmic relationship between income and happiness where the effect of a %age change in income has a constant effect on happiness.

I imagine there is a threshold where percentile wealth increases make the ultra-rich happy again. Whenever it grants you a noticeable increase in power and influence to increase your wealth, you kind of want to maximize it to maximize power and influence.

There is just a vast gap between the point where you stop spending money for consumption and when you can start spending money for influence.

Re: Money can buy happiness

#69

Post by nazgulnarsil »

oscargrouch wrote: post #65
Aqueous wrote: post #2

This seems obvious. Having no money is very stressful. Stress not only makes you generally very unhappy - it actually damages your brain ( http://www.ncbi.nlm.nih.gov/pubmed/15511597 ). Stress is an unhealthy thing to experience, especially when it is constant and your mind and body do not have time to recover. In small doses, a little stress keeps you moving, but its benefits drop off pretty quickly the more stress…

There are communities that doesnt even have a economy based on money, and are pretty happy.. there are indigenous people in reserves here and brazil and also some remote parts of africa that i know of.. (i imagine theres even more samples) If you start to look to them, they have a pretty smart way to achieve happyness without money.. they are very collective types in nature.. and not individualistic as we do.. the na…

yeah, the noble savages are very serene....until you notice the infectious disease and children and mothers constantly dying in childbirth.
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