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Money can buy happiness

economist.com

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Re: Money can buy happiness

#71

Post by randomdata »

marquis wrote: post #42
rtpg wrote: post #37

Earlier quoted context omitted.

Depends on where you are. After all, living in a rich environment might get you better public services. And it's not like you exchange salaries with everyone you meet.

It's a thought experiment. Assume that both neighbourhoods provide the same services.

Does it even matter what your neighbours are making? I've made four figures living among millionaires and I've made six figures living among people living on welfare. I didn't really feel any different in either spot.

Challenging yourself to earn more, and actually seeing the numbers rise, is where the joy comes from, at least in my experience. If you are challenging yourself and your income isn't rising (or falling, even) it is pretty disheartening. If you aren't challenging yourself, I expect life becomes pretty boring. Either way, I can see why happiness is linked to income deltas, even once the basic means are covered and presumably people with higher incomes have seen more changes.

Re: Money can buy happiness

#72

Post by marquis »

randomdata wrote: post #71
marquis wrote: post #42

Earlier quoted context omitted.

It's a thought experiment. Assume that both neighbourhoods provide the same services.

Does it even matter what your neighbours are making? I've made four figures living among millionaires and I've made six figures living among people living on welfare. I didn't really feel any different in either spot. Challenging yourself to earn more, and actually seeing the numbers rise, is where the joy comes from, at least in my experience. If you are challenging yourself and your income isn't rising (or falling,…

I don't necessarily feel this way either however it's a thought experiment to pose in regards to the concept of "keeping up with the jones's" and explains a large part of the population's consumerist drive.

Re: Money can buy happiness

#73

Post by marquis »

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…

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.

Re: Money can buy happiness

#74

Post by gjm11 »

collyw wrote: post #46

Whenever I see rich people, they don't see to smile a lot.

Smiling may be an indicator of other things besides happiness. It's been proposed (see e.g. http://www.epjournal.net/wp-content/uploads/EP10371397.pdf though I make no claim that that particular article proves it) that one function of smiling is an acknowledgement of lower social status than the person one's smiling at. If something like this is right, then rich people might smile less at any given level of happiness.

(Or: they may smile less in public, which will have a large influence on your perception of rich people's smiling if you don't happen to spend a lot of time in personal interactions with rich people. Or: they may in fact be less happy and therefore smile less -- though the evidence seems to be against this.)

Re: Money can buy happiness

#75

Post by auctiontheory »

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.

It is partly a fixed cost versus variable cost argument, although these guys don't express it that way. (And I realize that fixed isn't really "fixed.")

If you can't afford decent housing, adequate healthcare, and a good education for your kids, of course more money will buy you happiness. And in the US, the income at which you can afford those three ... is high and increasing fast.

Re: Money can buy happiness

#76

Post by sliverstorm »

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…

The traditionally-held view is that there is an income (I've heard something like 70k in the USA) where the plot should become a horizontal line, i.e. increasing your income increases your happiness by zero.

This might seem like a strange view, but the notion is not that money ceases to increase happiness, but rather increased happiness costs associated with earning that increased income start to negate the gains.

Anyway, this graph is self-reported life satisfaction. We would need to examine the metric used in the studies that came up with the ~70k number to see if we can even compare the two studies.

Re: Money can buy happiness

#77

Post by maratd »

ForHackernews wrote: post #7
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.

> incidentally is capped at a fairly low $128,000 Maybe they don't have data for people making more than that? There are relatively few people with incomes that high, and their time is probably valuable enough that they're disinclined to waste it filling out happiness inventories.

> There are relatively few people with incomes that high

The chart is of household income, not individual income. There are plenty of households who break that mark.

Re: Money can buy happiness

#79

Post by awakeasleep »

adwf wrote: post #24
volume wrote: post #11

I may sound like a conspiracy theorist but oh well: The cynic in me says such graphs are (figuratively) propaganda by the 1% (of 1% in wealth, not income), in that now we can define what the masses are "ok" with while we, the 1% of the 1%, can accelerate our gains further. Let the rest of them have crumbs and be content.

The cynic in me is actually thinking it's interesting that the Scandanavian countries are left off the charts. They are usually touted as being amongst the happiest countries in the world, despite rather aggressive tax regimes to pay for it. Perhaps there is some cherry picking going on here? Either as propaganda to show that the US is the happiest, or to show that money equals happiness - which might not be true in…

Here are some interesting figures on that.

http://en.wikipedia.org/wiki/Household_income

Re: Money can buy happiness

#80

Post by cowpig »

Some alternative titles: "People with a bitter taste for life are not making money" or "People who make a lot of money tend to be pretty pleased with themselves" or probably most accurately "People with a lot of money are pleased because it turns out our economic structure favours their particular skills or interests"
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