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Money can buy happiness

economist.com

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Re: Money can buy happiness

#121

Post by mertd »

Sakes wrote: post #102
mertd wrote: post #100

Earlier quoted context omitted.

That is pretty much Maslow's pyramid.

I'm not sure if your comment trivializes or validates mine. But in any event, I am very much a student of the school of hard knocks. Everything I mentioned above are my conclusions derived from over a decade of failures, successes, & self reflection.

It was meant to be an observation, no judgement or opinion. Now that you have provided some background, it is interesting that you produced the same set of priorities in the same order.

Re: Money can buy happiness

#122

Post by btilly »

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.

WHERE you live, or HOW you live?

I've seen many people complain about not making enough to live where they live, when I clearly see lifestyle changes that would fix the income problem, and I see people living alongside the first who make less and save more.

I don't know you. Or your life circumstances. It might not be true for you. But "$100k/year isn't enough to survive" is the kind of claim that I've learned to be automatically suspicious of.

Re: Money can buy happiness

#123

Post by DavidWoof »

marquis wrote: post #73
DavidWoof wrote: post #51

Earlier quoted context omitted.

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…

Take a village. Everyone earns $100,000 except you. You earn $80,000. How do you feel? Now reverse it. You earn $100,000. Everyone else earns $80,000. How do you feel? Those base feelings explains consumerism and envy.

I'd rather make $100K than $80K. Period. At those ratios, my neighbors just don't enter into the equation.

Now, I might be uncomfortable making $100K when my neighbors made $400K. That's an identifiable difference, and it would really mark me as the poor person in the neighborhood. But a 20% difference from the mean? I wouldn't even notice it.

Re: Money can buy happiness

#127

Post by hosh »

beefman wrote: post #84
hosh wrote: post #81

This poll is bullshit. They are asking people to imagine what their life would be if they have more money. Of course they say they would be satisfied (up to a point). However, what people say they want are not necessarily what they need or feel. Contentedness doesn't come from having everything you need, it's a feeling that can be generated from within and rested upon, whatever the situation you are in. What generate…

You have misunderstood. They ask people to report their actual income and their actual life satisfaction.

Fair enough, however, when I reread the post it says:

"They use a trove of data generated by Gallup, a polling firm, from its World Poll. Gallup asked respondents around the world to imagine a "satisfaction ladder" in which the top step represents a respondent's best possible life. Those being polled are then asked where on the ladder they stand (from zero to a maximum of 10), and how much they earn."

Not quite the same thing I said, but it still introduces a bias. The people are asked to first imagine what a "10" -- that is, their ideal, imagined happiness -- before rating their happiness. It is essentially still the same mechanic, imagining a happiness before putting your "actual" happiness against that scale.

Re: Money can buy happiness

#128

Post by edmondlau »

The Economist article actually conflates two happiness metrics, happiness as measured by emotional well-being and happiness as measured by life evaluation. Money buys happiness as measured by emotional well-being up to a point (that point being $75K for US residents), but higher income continues to increase life evaluation.

More details can be found in Daniel Kahneman's 2010 study, "High income improves evaluation of life but not emotional well-being"(http://www.pnas.org/content/107/38/16489.full), where he uses the results of 450,000 Gallup poll responses to analyze the effects of income on both happiness metrics.

Kahneman defines emotional well-being as "the emotional quality of an individual's everyday experience—the frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one's life pleasant or unpleasant." Life evaluation, on the other hand, refers to the thoughts that people have about their life when they think about it."

In the study, emotional well-being is captured via series of yes/no questions of the form "Did you experience a lot of stress yesterday?" or "Did you smile or laugh a lot yesterday?" The goal is to assess their emotional well-being on the previous day. Life evaluation is measured by asking respondents to rate their lives on a ladder scale from 0-10, where 0 is “the worst possible life for you” and 10 is “the best possible life for you.”

The data showed that for individuals earning below $75K, logarithmic increases in income (i.e. doubling one's income) positively correlate with scores for happiness, enjoyment, and smiling and negatively correlate with scores for sadness, worry, and stress. At $75K, you have enough to pay life's bills and still have discretionary money to go out and spend time with friends. The effects of income on emotional measures saturate at $75K because money no longer becomes the limiting resource for achieving more happiness, even though life satisfaction continues to rise when plotted against log income. "We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being," Kahneman writes.

Re: Money can buy happiness

#129

Post by geezer »

The Economist needs to understand the difference experiencing happiness and remembering happiness. Behavioral economists have done years of research differentiating the two. It makes no sense to talk about happiness otherwise.

The incomes in the range of 60k - 70k (in US) beyond which happiness plateaus out is valid in the context of experiencing happiness. Its fair to say that middle income people would be unhappy when they think about the fact that they are not millionaires/billionaires, but they are not thinking about that most of the time, and during that time, they are just as happy as millionaires/billionaires.

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