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Money can buy happiness

171 points by mckee1 13y ago

Aqueous 13y ago
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 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 you experience. Thus it stands to reason that if a major source of stress is removed (a lack of financial stability) that your overall happiness level goes up.
- smtddr 13y ago
  Depends on where/how you live and how much "value" you place on money. I think one could also argue that money causes stress depending on how much you have and how you got/maintain it. Here's what I think: - If you're born into money, money = happiness if you follow & believe in what the family wants you to do. - If you started a business that made you money, money = happiness more than half the time - If you got huge amounts of money suddenly, money = problems.
- oscargrouch 13y ago
  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..
  - nazgulnarsil 13y ago
    yeah, the noble savages are very serene....until you notice the infectious disease and children and mothers constantly dying in childbirth.
    - oscargrouch 13y ago
      just to make it clear: im not saying they live the perfect life.. but both types of civilizations have things to teach one another.. we have things to teach, but we also have things to learn.. things that we lost in the way.. What we constantly see, is the "white man" notion of superiority, and therefore that he has nothing to learn, from "primitives".. But the irony is that they have a lot to teach us.. Our societies are very complex, and one of the reasons for that is the infinite chain of the desire and need.. need this, need that.. never satisfied, never happy.. Being poor its not the problem, the problem its us.. the way we think and reproduce our lives and destiny.. looking at them can teach us a lot about ourselves and where we are doing wrong
      - nazgulnarsil 13y ago
        I agree, work/life balance has gone to shit since the agricultural revolution.
leoedin 13y ago
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.
- ForHackernews 13y ago
  > 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.
  - deleted 13y ago
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  - maratd 13y ago
    > 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.
    - randomdata 13y ago
      If we ignore many countries where $128K+ is quite rare, at least. In the US, about 14% of the households earn that much or more. However, the breakdown is more interesting here: Only ~1% of households in the US earn between $125-130K, compared to ~5% earning between $35-40K. The groups do become quite a bit less representative as you climb the income scale.
      - ars_technician 13y ago
        How do they become less representative? The sample groups are exactly representative when they are based on income. e.g. Polling millionaires about their feelings seems pretty representative of millionaires' feelings, even if there aren't that many.
marquis 13y ago
In regards to subjective happiness and income, I like to pose the question: Would you rather earn $80,000 and live in a neighbourhood of those earning $100,000, or would you rather earn $100,000 and live in a neighbourhood of those earning $80,000. Money and happiness is entirely subjective according to your environment.
- amiune 13y ago
  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."
  - marquis 13y ago
    Yes I think that's how it went!
  - DavidWoof 13y ago
    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 question to pose a true dilemma?
    - joshmlewis 13y ago
      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.
    - marquis 13y ago
      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.
danielharan 13y ago
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.
- jackgolding 13y ago
  Why not Australia or Canada?
  - danielharan 13y ago
    I am in Canada :) It just wasn't in the chart.
- _delirium 13y ago
  I'd pick somewhere in northern Europe probably. I might take the U.S. option if you could guarantee I was in the top 75% of the U.S. income scale. If I could really be randomly assigned anywhere on the scale, though, the U.S. seems too risky, because the low end of American lifestyles is really low, not even reaching the level of first-world poverty. Driving through parts of Mississippi was pretty surprising for someone who had never been there before: actual dilapidated shacks without running water, like you see on National Geographic documentaries about poor parts of the world. And urban American poverty, while it has running water, comes with too high a risk of violence.
  - adventured 13y ago
    At the same time, your reference points are a very small % of the American population, not the bottom 25%. Only 5% to 10% of the poor live the way you describe. America's poor is on average equivalent to France's middle class. Once our healthcare system is properly in place, that will be even more accurate. http://www.heritage.org/research/reports/2011/09/understanding-poverty-in-the-united-states-surprising-facts-about-americas-poor http://www.heritage.org/research/reports/2011/09/understandi... The average person in the bottom 25% also collects over $30,000 per year in government benefits, from housing to food to healthcare.
gmack 13y ago
Maybe it can't buy happiness, but it can definitely rent it.
volume 13y ago
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.
- adwf 13y ago
  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 the more socialist, high tax/lower net income Scandinavian countries. I'm probably being too cynical though. It's just surprising given the reputation of countries like Denmark and Norway for being happy, that any study could possibly leave them out.
  - danieldk 13y ago
    They are usually touted as being amongst the happiest countries in the world, despite rather aggressive tax regimes to pay for it. Or, according to the World Happiness report 2013: 1. Denmark, 2. Norway, 3. Switzerland, 4. The Netherlands, 5. Sweden. The US ranks 17th. Source: http://unsdsn.org/files/2013/09/WorldHappinessReport2013_online.pdf http://unsdsn.org/files/2013/09/WorldHappinessReport2013_onl...
  - rtpg 13y ago
    The paper is linked, available here (http://www.nber.org/papers/w18992.pdf?new_window=1 http://www.nber.org/papers/w18992.pdf?new_window=1) The graph they have included the 25 most populous countries, and is already a mess (lots of overlapping things). The Scandanavian countries didn't even make the cut on that one, the Economist probably took the ones that were the furthest apart. Maybe if all the Scandinavian countries fused together they could have made it?
    - 13y ago
yetanotherphd 13y ago
I think the evidence they show is actually very compelling. Even though there are clearly country fixed effects, the graph shows that both within and across countries. Of course what self reported happiness really measures is another matter...
MarcusBrutus 13y ago
Maybe it can't buy happiness but it can definitely buy off unhappiness, some of it anyhow (adapted from a line in "Psycho").
beering 13y ago
This appears on HN coincidentally after the discussion on rating differences between cultures[1], so that different countries may have different views about what a scale of 1-10 means. A 7 in Brazil might not be a 7 in India, for example. [1] https://news.ycombinator.com/item?id=7044833 https://news.ycombinator.com/item?id=7044833
- rtpg 13y ago
  This is by far the biggest issue I have with any sort of international "happiness" scale. Some people like to complain a lot more than others, and culture-wide differences can be huge. For example, the Economist had an article on the general malaise that hits the French (http://www.economist.com/news/christmas-specials/21591749-bleak-chic?zid=307&ah=5e80419d1bc9821ebe173f4f0f060a07 http://www.economist.com/news/christmas-specials/21591749-bl...).
- bryanlarsen 13y ago
  The graph in the linked article uses separate lines for each country. The position of each line is different but the slope is surprisingly similar.
- alextingle 13y ago
  It would be nice to see the "income" axis adjusted for cost of living.
deleted 13y ago
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ExpiredLink 13y ago
Now chart the medication of psychotropic drugs in those countries.
stanmancan 13y ago
I'm curious what the result show if you did not have to work for your money? While money does not make you happier when you work for it I wonder what portion of that is due to the additional stress, long hours, and responsibility that comes with high income jobs.
dsugarman 13y ago
satisfaction != happiness
- mwfunk 13y ago
  Satisfaction is an element of happiness. I can't imagine someone being super happy if they are fundamentally dissatisfied with their life.
billyjobob 13y ago
The participants were not asked how happy they were, they were asked where they stood on a 'satisfaction ladder' with the best life they could imagine at the top. Many people may be perfectly happy, but they know their position on the wealth scale and imagine that they would feel more satisfied at the top of that scale.
- rtpg 13y ago
  people are actually pretty bad at defining where they are on the wealth scale. For example, loads of very rich Americans seem to think they're middle class (the WSJ once portrayed a middle-class family as earning $100000 a year, which actually places them in the top quintile). This article describes how it is a relatively universal factor though (everyone thinks they're kinda in the middle)(http://economix.blogs.nytimes.com/2011/04/27/everyone-is-middle-class-right/?_r=0 http://economix.blogs.nytimes.com/2011/04/27/everyone-is-mid...)
  - ig1 13y ago
    You seem to under the misapprehension that middle-class refers to a median income grouping when that's not actually the case: http://en.wikipedia.org/wiki/American_middle_class http://en.wikipedia.org/wiki/American_middle_class
    - eropple 13y ago
      What you call a misapprehension I would instead call "identifying a delusion." The faux-classlessness of American society is one of the weirder and to my mind deleterious aspects of the American character, in part because I think it feeds into Steinbeck's temporarily-embarrassed-millionaires phenomenon (the rush of actual middle-class people to defend the people who will profit from their defense). And I don't think it holds true, anyway. I don't have the same problems as someone making $25,000 a year (approximately the 48th percentile as per Wikipedia), though they are recognizable to me in the abstract. I also don't have the same problems as someone making $200K a year and they are utterly foreign.
  - TheCoelacanth 13y ago
gruseom 13y ago
The study uses an odd and rather dubious measure of "happiness": Gallup asked respondents [...] 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 What the results may show is that fantasies about happiness, such as "if only I had more money", lose power as one gets more money. If you run out of fantasies about how you might be happier, it does not follow that you are happy. It could be the opposite! Perhaps the article should be titled, "Money weakens the imagination". In any case, studies that define "happiness" very differently should not be described as "casting doubt" on one another. Edit: looking at the paper itself, the "imaginary ladder" was one of two questions asked; the other was (paraphrased) "how satisfied are you on a scale of 1 to 10?" I don't know how the data differs between those two questions.
bane 13y ago
Money is like engine oil. An engine without enough runs poorly, but it doesn't take all that much to get it to run smoothly. More than that doesn't help or hurt, it just sits in a reservoir somewhere. You can get a bigger engine that uses more oil, but beyond some point it just doesn't matter much.
scottfr 13y ago
Abstract of the cited article (http://www.nber.org/papers/w18992?utm_campaign=ntw&utm_medium=email&utm_source=ntw http://www.nber.org/papers/w18992?utm_campaign=ntw&utm_mediu...): Many scholars have argued that once “basic needs” have been met, higher income is no longer associated with higher in subjective well-being. We assess the validity of this claim in comparisons of both rich and poor countries, and also of rich and poor people within a country. Analyzing multiple datasets, multiple definitions of “basic needs” and multiple questions about well-being, we find no support for this claim. The relationship between well-being and income is roughly linear-log and does not diminish as incomes rise. If there is a satiation point, we are yet to reach it.
- aidanbrandt 13y ago
  Full Paper: http://www.brookings.edu/~/media/research/files/papers/2013/04/subjective%20well%20being%20income/subjective%20well%20being%20income.pdf http://www.brookings.edu/~/media/research/files/papers/2013/...
  - paulovsk 13y ago
    thanks!
dllthomas 13y ago
"Even more striking, the relationship between income and happiness hardly changes as incomes rise. Moving from rich to richer seems to raise happiness just as much as moving from poor to less poor." That's misleading (to be charitable...). Doubling your income seems to raise happiness as much, whether you're moving form poor to less poor or rich to more rich, within the ranges looked at. Adding $5000 means a lot more happiness for the poor than the wealthy.
collyw 13y ago
Whenever I see rich people, they don't see to smile a lot.
- gjm11 13y ago
  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 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.)
11thEarlOfMar 13y ago
The slope of the lines indicates how big an impact different incomes have. Contrast India and Nigeria, for example. A Nigerian needs a lot more to have the same incremental in increase in satisfaction as an Indian. Interestingly, Germany, Russia and India seem to be about parallel, even though the income ranges are different. Is that just coincidence? Or is there an underlying cause? Also, how well does the question itself translate among different languages and societies? Can the same concept be put across effectively?
raymondh 13y ago
There appears to be a single main diagonal that includes China, Russia, Italy, France, and Germany. Above that diagonal are countries where it takes less money to achieve that same satisfaction as those on the main diagonal. Apparently, Brazil, Mexico, India, and Nigeria get more satisfaction for the same level of income. That leaves Japan and Iran as the outliers where you get far less satisfaction for a given income level. The slope of the lines is also interesting. Nigeria and Brazil stand-out as two places where income matters less it does others. The US and UK are also flatter (less income elastic) than the main diagonal.
mb_72 13y ago
People become acclimatised to 'new wealth'. One thing I learned from life experience, and then actually understood after studying Buddhist philosophy, is that it's very easy to enter a repetitive cycle of desire, some achievement, then more desire ... one yearns to make more money, makes it (via payrise or other successful project), gets used to having that money, wants more, makes more, and so on. The trick is to be satisfied / happy with what you have; it's not practical or very likely that your income will keep increasing 'forever'. I can honestly state that I'm happier now making less money, not owning a house, nor having many of the trappings of 'success' that I had 10 years ago. I admit, however, some ill-placed desire to see if I might be happier now 'making money' than I was in the past; my healthier (IMO) life outlook might be simply as a result of more wisdom rather than less money.
- oscargrouch 13y ago
  Great point. The perspective you have for life, its what matters the most.. to do this research well they should detect different "life philosophies" or paradigms.. like "materialist type", "spiritual type", "dionisiac type", "apolinian type".. etc.. and also measure them in diferent points in life.. for instance, when younger is cool to be dionisiac.. you will be happy than.. but as you grow up.. different things matter most.. and or you will shift paradigms or you will get more unhapier with time. As a example of why do periodic research based in paradigms is important.. I think this is a complex matter to be viewed so trivially.. i dont think it proves much anything of value, in the way this research was conducted.
- foobarian 13y ago
  I like the whole ascetic lifestyle philosophy but I find it harder to follow with a family and kids. At this point I'm perfectly fine with doing a number of distasteful materialistic things such as taking on debt or owning a house, because it benefits the kids and they don't have to know about the decisions.
pyduan 13y ago
This is one of the big controversies in happiness economics. I wonder if this effect (which directly contradicts Easterlin's findings that money has no effect on happiness past a certain point; here, they contend that there is no saturation point and that happiness evolves with the logarithm of income) could be somewhat due to the way they framed the question: "assume you are on a ladder of happiness with 10 steps, which one would you say you are on; then tell us how much you earn". It is widely known in behavioral economics that framing effects can have a huge effect on the way people respond ([1] [2], and so on), so I wouldn't be surprised than the way you ask people to evaluate their own happiness could explain at least part of the difference. One of the conclusions of the Easterlin Paradox is that people care more about how much they earn compared to their neighbors than the actual amount. I feel like asking the question this way (imagining their happiness as a ladder with 10 steps, then thinking about their income) would directly lead to people implicitly internalizing this comparison in some kind of mental model where higher wealth = more happiness because they're trying to imagine what the best life possible could be: "ah I'm pretty happy right now, but if I had a twice as much money I think I would be happier though, so surely I can't be at the last step at the ladder. Actually, people who have twice as much than that should be even happier, so I'll add some steps on top and say I'm a 6 right now". This sounds plausible to me because while the authors conclude there is no saturation point where income doesn't bring more happiness, this is a scale from 1 to 10 so surely some people must rate themselves a 10. What would those who earn twice as much as them think then? This solution could be that "being on top of the ladder" in people's mind is somehow conflated with "being on top of the income distribution", with all the other levels being computed relatively to that. In other terms, this framing may incite people to evaluate their happiness on a cross-sectional level, with Easterlin's Paradox being precisely that the income-happiness relationship exists only at the cross-sectional level but not at the longitudinal level. The debate between the two models (Easterlin vs. Stevenson and Wolfers) has been a longstanding debate in happiness economics, with both sides having confirmed their findings with multiple data sets [3]. Maybe they're both right in a sense and the answer just depends on which definition of happiness you're asking people to evaluate themselves with (relative vs. on an absolute level)? [1] http://economistsview.typepad.com/economistsview/2006/08/the_framing_eff.html http://economistsview.typepad.com/economistsview/2006/08/the... [2] http://www.adsavvy.org/the-power-of-framing-effects-and-other-cognitive-biases/ http://www.adsavvy.org/the-power-of-framing-effects-and-othe... [3] http://en.wikipedia.org/wiki/Easterlin_paradox http://en.wikipedia.org/wiki/Easterlin_paradox
brubaker 13y ago
"Anyone that says money can't buy happiness, doesn't fucking have any"
ChristianMarks 13y ago
One could maintain the manipulative fiction that money is unrelated to happiness above some nominal level (around $75,000) as a pretext to keep wages low for only so long.
cowpig 13y ago
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"
hosh 13y ago
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 generates a lot of confusion and suffering comes from the difference between the imagined happiness ("If only ...") and the ability to be content in the present moment. (And sure! "Present moment" can be anything from sitting quietly outside and listening to skydiving). As long as you have an imagined happiness, that "if only X, Y, and Z happens", then you will never be satisfied. It's totally crazy. People can just be happy right now, and go on with their lives, instead of twisting themselves up inside.
- beefman 13y ago
  You have misunderstood. They ask people to report their actual income and their actual life satisfaction.
  - hosh 13y ago
    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.
- freshhawk 13y ago
  It's not bullshit, it's interesting. But comparing this result to the previous results is not valid considering the very strong framing device they used to get that result. They are basically getting people to judge their happiness against a hypothetical future rich self, when we already know that people have a bias to assuming more money would make them much happier than it actually would. If I wanted to "prove" money made you happier I would construct a poll exactly like this (or at least I hope I would have been smart enough to come up with this). The fact that it worked is still interesting however.
quadrangle 13y ago
Correlation ≠ causation. If you live in a society where the propaganda tells you that wealth = success & value & esteem, then of course there's some connection. Maybe if we really lived in a culture where hoarding wealth was considered shameful, it would make people less happy to do so.
- king_phil 13y ago
  I always wonder how easily scientists (and journalists) fall for the correlation vs. causality trap. It looks like that scientific community lost the critical thinking. I always think the other way around when I read a "scientific" study and ask (in this case): "Do people with higher life satisfaction earn more money?" (=the cause of the better earnings is the satisfaction, not the other way around). Without reading the study it's impossible to tell that the researchers ruled this out, but it is imaginable that this is the case, too. And it could be that there is a factor that is invisible to the study (maybe... IQ, height of the person, shoe size, ...?) that influences BOTH.
Sakes 13y ago
Money can buy security and that security increases your happiness. Not having money can make you unhappy. Sustainable happiness is recognizing what is truly valuable in life and appreciating it. For me this is: 1) No debt 2) Full stomach/quenched thirst 3) A warm place to sleep 3) Meaningful intimate loving relationships 4) A sense that I am valuable (adding value to the world or some subset) 5) Freedom to indulge my curiosities through exploration/experimentation/participation. 6) And in its most abstract definition, freedom to experience a spiritual life.
- mertd 13y ago
  That is pretty much Maslow's pyramid.
  - Sakes 13y ago
    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.
    - mertd 13y ago
      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.
- slurry 13y ago
  1. No debt is fairly expensive in this world. Either you need a nontrivial income or a fairly high threshold for ascetic living. 2. Full stomach/quenched thirst is trivial if you don't mind tap water and simple starches, but once you add (depending on your taste) a complement of steak, quinoa, fresh fruits, beer and/or wine - then you run into a little money. 3. Warm place to sleep - anywhere near work? public transport? "good" schools (however you define that)? Gets expensive quick. 3bis. Meaningful intimate loving relationships are easier to maintain if you have at least one weekend day off (i.e. don't have to work 2 or more jobs) and have at least a little cash to go out on the town at least once in a while. 4. Sense that I am valuable - to me, this has always been difficult without a modestly good set of clothes, shoes and a haircut. Others don't feel that way (but less than you'd think). But maintaining a personal sense of one's value is at least somewhat correlated with others' sense of ones' value. And others' sense of one's value is never completely monetarily free. 5-6. Freedom to indulge curiosities and spiritual life - on a low income, you'd better be single and childless. And even then, it's a challenge. I very much doubt the average person could fulfill those goals to any degree of satisfaction on less than 50k as a single person in a major metro area, not a ton less in the boondocks, and not much less than double that with a partner or spouse.
mindcrime 13y ago
Obligatory: https://www.youtube.com/watch?v=S63kIH96Bi0 https://www.youtube.com/watch?v=S63kIH96Bi0 "They say money can't buy happiness? Look at the fucking smile on my face".
deleted 13y ago
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PavlovsCat 13y ago
Am I wrong to dismiss just about anything that depends on asking people? I don't have good ideas on how to measure happiness, but even the worst of them seems better than asking and leaving it at that.
VLM 13y ago
Another peculiar interpretation of the same data: People segregate strongly by income, and you're happier if your neighbors are wealthy rather than poor. Not just crime but schools and parks and services.
bake 13y ago
The distinction between INCOME and WEALTH here is important, a distinction which the title/thesis of this article ignores. The title implies that simply POSSESSING money (wealth) is positively related to happiness, whereas the survey could only support the claim that EARNING money (income) is positively related to happiness. I would argue that income is a much better proxy for the value a person creates in the world than is wealth (though both are deeply, deeply imperfect). I would much more readily believe a survey which implies 'people who believe they create more value in the world are more likely to be happy'.
tszyn 13y ago
It's really impossible to rate your life numerically in relation to a "best possible life", so in order to give some kind of answer to this vague question, respondents fall back on some quantifiable measure like money. A separate issue is that the question "How satisfied are you WITH your life?" is not the same as "How satisfied are you IN your life?". It's possible to have high moment-to-moment happiness, but have a negative view of one's life; or vice versa. Daniel Kahnemann explains this in this TED talk (13:30): http://www.ted.com/talks/daniel_kahneman_the_riddle_of_experience_vs_memory.html http://www.ted.com/talks/daniel_kahneman_the_riddle_of_exper... He even mentions the Gallup World Poll.
brandonhsiao 13y ago
The survey measures people's self-perceived satisfaction. I have no difficulty believing that richer people think they're happier, but the survey tells little about whether they actually are.
acd 13y ago
People should know that Rotschild owns part of the magazine The Economist. http://en.wikipedia.org/wiki/The_Economist http://en.wikipedia.org/wiki/The_Economist
lsdafjklsd 13y ago
...It buys a WaveRunner
lifeformed 13y ago
I think it's less that "money buys happiness" as it is that "poverty causes unhappiness".
edmondlau 13y ago
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 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.
geezer 13y ago
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.
kimonos 13y ago
This is actually true at some point but there are really genuine happiness that money can't buy like love, friendship, loyalty and trust.
peter_l_downs 13y ago
I hope so.
shmerl 13y ago
What is happiness? It's pretty subjective, therefore the title isn't even proper, since it assumes a generalization.
orasis 13y ago
Notice Japan - they work too damn much to be satisfied with their lives.
ta_monkiner 13y ago
Money can buy the appearance of happiness, but happiness comes from inside, not from outside. It's a skill one can develop. Recommended reading: Matthieu Ricard's book "Happiness: A Guide to Developing Life's Most Important Skill"
dschiptsov 13y ago
Only as means to provide changes in people's lives, not necessarily only your own. It has nothing to do with possessions or consumption, and especially this exhibitionistic, public consumption which is pushed by the media. Giving a new pair of boots or a new jacket to some poor school children in Nepal or India will definitely buy some happiness. New iPad for oneself, of course, won't. A long journey to different lands as a CBT for an addict will buy some happiness, while visiting the most distant and expensive to reach island in Pacific won't. Traveling remote Indian/Nepali/Tibetan villages will buy some happiness, while stupid yoga course won't. I'm mountaineering guide and ex-addict, that's why I know.
chavesn 13y ago
Bypass paywall (maybe the paywall only starts after 1 day?): http://www.google.com/url?q=http://www.economist.com/blogs/graphicdetail/2013/05/daily-chart-0 http://www.google.com/url?q=http://www.economist.com/blogs/g...
DanBC 13y ago
I know that if I had just £1,000 that I'd be a lot happier. I'd be able to focus on recovery rather than all the nonsense that I worry on at the moment.
Vaenae 13y ago
I find the conclusion that there is no cap where more money won't buy you more happiness a bit funny, when there's an explicitly defined cap in the question itself. No amount of money will make you any happier when you've already reached level 10.

171 points by mckee1 13y ago

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 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 you experience. Thus it stands to reason that if a major source of stress is removed (a lack of financial stability) that your overall happiness level goes up.

smtddr 13y ago
Depends on where/how you live and how much "value" you place on money. I think one could also argue that money causes stress depending on how much you have and how you got/maintain it. Here's what I think: - If you're born into money, money = happiness if you follow & believe in what the family wants you to do. - If you started a business that made you money, money = happiness more than half the time - If you got huge amounts of money suddenly, money = problems.
oscargrouch 13y ago
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..
- nazgulnarsil 13y ago
  yeah, the noble savages are very serene....until you notice the infectious disease and children and mothers constantly dying in childbirth.
  - oscargrouch 13y ago
    just to make it clear: im not saying they live the perfect life.. but both types of civilizations have things to teach one another.. we have things to teach, but we also have things to learn.. things that we lost in the way.. What we constantly see, is the "white man" notion of superiority, and therefore that he has nothing to learn, from "primitives".. But the irony is that they have a lot to teach us.. Our societies are very complex, and one of the reasons for that is the infinite chain of the desire and need.. need this, need that.. never satisfied, never happy.. Being poor its not the problem, the problem its us.. the way we think and reproduce our lives and destiny.. looking at them can teach us a lot about ourselves and where we are doing wrong
    - nazgulnarsil 13y ago
      I agree, work/life balance has gone to shit since the agricultural revolution.

leoedin 13y ago

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.

ForHackernews 13y ago
> 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.
- deleted 13y ago
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- maratd 13y ago
  > 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.
  - randomdata 13y ago
    If we ignore many countries where $128K+ is quite rare, at least. In the US, about 14% of the households earn that much or more. However, the breakdown is more interesting here: Only ~1% of households in the US earn between $125-130K, compared to ~5% earning between $35-40K. The groups do become quite a bit less representative as you climb the income scale.
    - ars_technician 13y ago
      How do they become less representative? The sample groups are exactly representative when they are based on income. e.g. Polling millionaires about their feelings seems pretty representative of millionaires' feelings, even if there aren't that many.

marquis 13y ago

In regards to subjective happiness and income, I like to pose the question: Would you rather earn $80,000 and live in a neighbourhood of those earning $100,000, or would you rather earn $100,000 and live in a neighbourhood of those earning $80,000. Money and happiness is entirely subjective according to your environment.

amiune 13y ago
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."
- marquis 13y ago
  Yes I think that's how it went!
- DavidWoof 13y ago
  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 question to pose a true dilemma?
  - joshmlewis 13y ago
    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.
  - marquis 13y ago
    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.

danielharan 13y ago

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.

jackgolding 13y ago
Why not Australia or Canada?
- danielharan 13y ago
  I am in Canada :) It just wasn't in the chart.
_delirium 13y ago
I'd pick somewhere in northern Europe probably. I might take the U.S. option if you could guarantee I was in the top 75% of the U.S. income scale. If I could really be randomly assigned anywhere on the scale, though, the U.S. seems too risky, because the low end of American lifestyles is really low, not even reaching the level of first-world poverty. Driving through parts of Mississippi was pretty surprising for someone who had never been there before: actual dilapidated shacks without running water, like you see on National Geographic documentaries about poor parts of the world. And urban American poverty, while it has running water, comes with too high a risk of violence.
- adventured 13y ago
  At the same time, your reference points are a very small % of the American population, not the bottom 25%. Only 5% to 10% of the poor live the way you describe. America's poor is on average equivalent to France's middle class. Once our healthcare system is properly in place, that will be even more accurate. http://www.heritage.org/research/reports/2011/09/understanding-poverty-in-the-united-states-surprising-facts-about-americas-poor http://www.heritage.org/research/reports/2011/09/understandi... The average person in the bottom 25% also collects over $30,000 per year in government benefits, from housing to food to healthcare.

gmack 13y ago

Maybe it can't buy happiness, but it can definitely rent it.

volume 13y ago

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.

adwf 13y ago
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 the more socialist, high tax/lower net income Scandinavian countries. I'm probably being too cynical though. It's just surprising given the reputation of countries like Denmark and Norway for being happy, that any study could possibly leave them out.
- danieldk 13y ago
  They are usually touted as being amongst the happiest countries in the world, despite rather aggressive tax regimes to pay for it. Or, according to the World Happiness report 2013: 1. Denmark, 2. Norway, 3. Switzerland, 4. The Netherlands, 5. Sweden. The US ranks 17th. Source: http://unsdsn.org/files/2013/09/WorldHappinessReport2013_online.pdf http://unsdsn.org/files/2013/09/WorldHappinessReport2013_onl...
- rtpg 13y ago
  The paper is linked, available here (http://www.nber.org/papers/w18992.pdf?new_window=1 http://www.nber.org/papers/w18992.pdf?new_window=1) The graph they have included the 25 most populous countries, and is already a mess (lots of overlapping things). The Scandanavian countries didn't even make the cut on that one, the Economist probably took the ones that were the furthest apart. Maybe if all the Scandinavian countries fused together they could have made it?
  - 13y ago

yetanotherphd 13y ago

I think the evidence they show is actually very compelling. Even though there are clearly country fixed effects, the graph shows that both within and across countries. Of course what self reported happiness really measures is another matter...

MarcusBrutus 13y ago

Maybe it can't buy happiness but it can definitely buy off unhappiness, some of it anyhow (adapted from a line in "Psycho").

beering 13y ago

This appears on HN coincidentally after the discussion on rating differences between cultures[1], so that different countries may have different views about what a scale of 1-10 means. A 7 in Brazil might not be a 7 in India, for example. [1] https://news.ycombinator.com/item?id=7044833 https://news.ycombinator.com/item?id=7044833

rtpg 13y ago
This is by far the biggest issue I have with any sort of international "happiness" scale. Some people like to complain a lot more than others, and culture-wide differences can be huge. For example, the Economist had an article on the general malaise that hits the French (http://www.economist.com/news/christmas-specials/21591749-bleak-chic?zid=307&ah=5e80419d1bc9821ebe173f4f0f060a07 http://www.economist.com/news/christmas-specials/21591749-bl...).
bryanlarsen 13y ago
The graph in the linked article uses separate lines for each country. The position of each line is different but the slope is surprisingly similar.
alextingle 13y ago
It would be nice to see the "income" axis adjusted for cost of living.

deleted 13y ago

[deleted]

ExpiredLink 13y ago

Now chart the medication of psychotropic drugs in those countries.

stanmancan 13y ago

I'm curious what the result show if you did not have to work for your money? While money does not make you happier when you work for it I wonder what portion of that is due to the additional stress, long hours, and responsibility that comes with high income jobs.

dsugarman 13y ago

satisfaction != happiness

mwfunk 13y ago
Satisfaction is an element of happiness. I can't imagine someone being super happy if they are fundamentally dissatisfied with their life.

billyjobob 13y ago

The participants were not asked how happy they were, they were asked where they stood on a 'satisfaction ladder' with the best life they could imagine at the top. Many people may be perfectly happy, but they know their position on the wealth scale and imagine that they would feel more satisfied at the top of that scale.

rtpg 13y ago
people are actually pretty bad at defining where they are on the wealth scale. For example, loads of very rich Americans seem to think they're middle class (the WSJ once portrayed a middle-class family as earning $100000 a year, which actually places them in the top quintile). This article describes how it is a relatively universal factor though (everyone thinks they're kinda in the middle)(http://economix.blogs.nytimes.com/2011/04/27/everyone-is-middle-class-right/?_r=0 http://economix.blogs.nytimes.com/2011/04/27/everyone-is-mid...)
- ig1 13y ago
  You seem to under the misapprehension that middle-class refers to a median income grouping when that's not actually the case: http://en.wikipedia.org/wiki/American_middle_class http://en.wikipedia.org/wiki/American_middle_class
  - eropple 13y ago
    What you call a misapprehension I would instead call "identifying a delusion." The faux-classlessness of American society is one of the weirder and to my mind deleterious aspects of the American character, in part because I think it feeds into Steinbeck's temporarily-embarrassed-millionaires phenomenon (the rush of actual middle-class people to defend the people who will profit from their defense). And I don't think it holds true, anyway. I don't have the same problems as someone making $25,000 a year (approximately the 48th percentile as per Wikipedia), though they are recognizable to me in the abstract. I also don't have the same problems as someone making $200K a year and they are utterly foreign.
- TheCoelacanth 13y ago

gruseom 13y ago

The study uses an odd and rather dubious measure of "happiness": Gallup asked respondents [...] 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 What the results may show is that fantasies about happiness, such as "if only I had more money", lose power as one gets more money. If you run out of fantasies about how you might be happier, it does not follow that you are happy. It could be the opposite! Perhaps the article should be titled, "Money weakens the imagination". In any case, studies that define "happiness" very differently should not be described as "casting doubt" on one another. Edit: looking at the paper itself, the "imaginary ladder" was one of two questions asked; the other was (paraphrased) "how satisfied are you on a scale of 1 to 10?" I don't know how the data differs between those two questions.

bane 13y ago

Money is like engine oil. An engine without enough runs poorly, but it doesn't take all that much to get it to run smoothly. More than that doesn't help or hurt, it just sits in a reservoir somewhere. You can get a bigger engine that uses more oil, but beyond some point it just doesn't matter much.

scottfr 13y ago

Abstract of the cited article (http://www.nber.org/papers/w18992?utm_campaign=ntw&utm_medium=email&utm_source=ntw http://www.nber.org/papers/w18992?utm_campaign=ntw&utm_mediu...): Many scholars have argued that once “basic needs” have been met, higher income is no longer associated with higher in subjective well-being. We assess the validity of this claim in comparisons of both rich and poor countries, and also of rich and poor people within a country. Analyzing multiple datasets, multiple definitions of “basic needs” and multiple questions about well-being, we find no support for this claim. The relationship between well-being and income is roughly linear-log and does not diminish as incomes rise. If there is a satiation point, we are yet to reach it.

aidanbrandt 13y ago
Full Paper: http://www.brookings.edu/~/media/research/files/papers/2013/04/subjective%20well%20being%20income/subjective%20well%20being%20income.pdf http://www.brookings.edu/~/media/research/files/papers/2013/...
- paulovsk 13y ago
  thanks!

dllthomas 13y ago

"Even more striking, the relationship between income and happiness hardly changes as incomes rise. Moving from rich to richer seems to raise happiness just as much as moving from poor to less poor." That's misleading (to be charitable...). Doubling your income seems to raise happiness as much, whether you're moving form poor to less poor or rich to more rich, within the ranges looked at. Adding $5000 means a lot more happiness for the poor than the wealthy.

collyw 13y ago

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

gjm11 13y ago
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 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.)

11thEarlOfMar 13y ago

The slope of the lines indicates how big an impact different incomes have. Contrast India and Nigeria, for example. A Nigerian needs a lot more to have the same incremental in increase in satisfaction as an Indian. Interestingly, Germany, Russia and India seem to be about parallel, even though the income ranges are different. Is that just coincidence? Or is there an underlying cause? Also, how well does the question itself translate among different languages and societies? Can the same concept be put across effectively?

raymondh 13y ago

There appears to be a single main diagonal that includes China, Russia, Italy, France, and Germany. Above that diagonal are countries where it takes less money to achieve that same satisfaction as those on the main diagonal. Apparently, Brazil, Mexico, India, and Nigeria get more satisfaction for the same level of income. That leaves Japan and Iran as the outliers where you get far less satisfaction for a given income level. The slope of the lines is also interesting. Nigeria and Brazil stand-out as two places where income matters less it does others. The US and UK are also flatter (less income elastic) than the main diagonal.

mb_72 13y ago

People become acclimatised to 'new wealth'. One thing I learned from life experience, and then actually understood after studying Buddhist philosophy, is that it's very easy to enter a repetitive cycle of desire, some achievement, then more desire ... one yearns to make more money, makes it (via payrise or other successful project), gets used to having that money, wants more, makes more, and so on. The trick is to be satisfied / happy with what you have; it's not practical or very likely that your income will keep increasing 'forever'. I can honestly state that I'm happier now making less money, not owning a house, nor having many of the trappings of 'success' that I had 10 years ago. I admit, however, some ill-placed desire to see if I might be happier now 'making money' than I was in the past; my healthier (IMO) life outlook might be simply as a result of more wisdom rather than less money.

oscargrouch 13y ago
Great point. The perspective you have for life, its what matters the most.. to do this research well they should detect different "life philosophies" or paradigms.. like "materialist type", "spiritual type", "dionisiac type", "apolinian type".. etc.. and also measure them in diferent points in life.. for instance, when younger is cool to be dionisiac.. you will be happy than.. but as you grow up.. different things matter most.. and or you will shift paradigms or you will get more unhapier with time. As a example of why do periodic research based in paradigms is important.. I think this is a complex matter to be viewed so trivially.. i dont think it proves much anything of value, in the way this research was conducted.
foobarian 13y ago
I like the whole ascetic lifestyle philosophy but I find it harder to follow with a family and kids. At this point I'm perfectly fine with doing a number of distasteful materialistic things such as taking on debt or owning a house, because it benefits the kids and they don't have to know about the decisions.

pyduan 13y ago

This is one of the big controversies in happiness economics. I wonder if this effect (which directly contradicts Easterlin's findings that money has no effect on happiness past a certain point; here, they contend that there is no saturation point and that happiness evolves with the logarithm of income) could be somewhat due to the way they framed the question: "assume you are on a ladder of happiness with 10 steps, which one would you say you are on; then tell us how much you earn". It is widely known in behavioral economics that framing effects can have a huge effect on the way people respond ([1] [2], and so on), so I wouldn't be surprised than the way you ask people to evaluate their own happiness could explain at least part of the difference. One of the conclusions of the Easterlin Paradox is that people care more about how much they earn compared to their neighbors than the actual amount. I feel like asking the question this way (imagining their happiness as a ladder with 10 steps, then thinking about their income) would directly lead to people implicitly internalizing this comparison in some kind of mental model where higher wealth = more happiness because they're trying to imagine what the best life possible could be: "ah I'm pretty happy right now, but if I had a twice as much money I think I would be happier though, so surely I can't be at the last step at the ladder. Actually, people who have twice as much than that should be even happier, so I'll add some steps on top and say I'm a 6 right now". This sounds plausible to me because while the authors conclude there is no saturation point where income doesn't bring more happiness, this is a scale from 1 to 10 so surely some people must rate themselves a 10. What would those who earn twice as much as them think then? This solution could be that "being on top of the ladder" in people's mind is somehow conflated with "being on top of the income distribution", with all the other levels being computed relatively to that. In other terms, this framing may incite people to evaluate their happiness on a cross-sectional level, with Easterlin's Paradox being precisely that the income-happiness relationship exists only at the cross-sectional level but not at the longitudinal level. The debate between the two models (Easterlin vs. Stevenson and Wolfers) has been a longstanding debate in happiness economics, with both sides having confirmed their findings with multiple data sets [3]. Maybe they're both right in a sense and the answer just depends on which definition of happiness you're asking people to evaluate themselves with (relative vs. on an absolute level)? [1] http://economistsview.typepad.com/economistsview/2006/08/the_framing_eff.html http://economistsview.typepad.com/economistsview/2006/08/the... [2] http://www.adsavvy.org/the-power-of-framing-effects-and-other-cognitive-biases/ http://www.adsavvy.org/the-power-of-framing-effects-and-othe... [3] http://en.wikipedia.org/wiki/Easterlin_paradox http://en.wikipedia.org/wiki/Easterlin_paradox

brubaker 13y ago

"Anyone that says money can't buy happiness, doesn't fucking have any"

ChristianMarks 13y ago

One could maintain the manipulative fiction that money is unrelated to happiness above some nominal level (around $75,000) as a pretext to keep wages low for only so long.

cowpig 13y ago

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"

hosh 13y ago

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 generates a lot of confusion and suffering comes from the difference between the imagined happiness ("If only ...") and the ability to be content in the present moment. (And sure! "Present moment" can be anything from sitting quietly outside and listening to skydiving). As long as you have an imagined happiness, that "if only X, Y, and Z happens", then you will never be satisfied. It's totally crazy. People can just be happy right now, and go on with their lives, instead of twisting themselves up inside.

beefman 13y ago
You have misunderstood. They ask people to report their actual income and their actual life satisfaction.
- hosh 13y ago
  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.
freshhawk 13y ago
It's not bullshit, it's interesting. But comparing this result to the previous results is not valid considering the very strong framing device they used to get that result. They are basically getting people to judge their happiness against a hypothetical future rich self, when we already know that people have a bias to assuming more money would make them much happier than it actually would. If I wanted to "prove" money made you happier I would construct a poll exactly like this (or at least I hope I would have been smart enough to come up with this). The fact that it worked is still interesting however.

quadrangle 13y ago

Correlation ≠ causation. If you live in a society where the propaganda tells you that wealth = success & value & esteem, then of course there's some connection. Maybe if we really lived in a culture where hoarding wealth was considered shameful, it would make people less happy to do so.

king_phil 13y ago
I always wonder how easily scientists (and journalists) fall for the correlation vs. causality trap. It looks like that scientific community lost the critical thinking. I always think the other way around when I read a "scientific" study and ask (in this case): "Do people with higher life satisfaction earn more money?" (=the cause of the better earnings is the satisfaction, not the other way around). Without reading the study it's impossible to tell that the researchers ruled this out, but it is imaginable that this is the case, too. And it could be that there is a factor that is invisible to the study (maybe... IQ, height of the person, shoe size, ...?) that influences BOTH.

Sakes 13y ago

Money can buy security and that security increases your happiness. Not having money can make you unhappy. Sustainable happiness is recognizing what is truly valuable in life and appreciating it. For me this is: 1) No debt 2) Full stomach/quenched thirst 3) A warm place to sleep 3) Meaningful intimate loving relationships 4) A sense that I am valuable (adding value to the world or some subset) 5) Freedom to indulge my curiosities through exploration/experimentation/participation. 6) And in its most abstract definition, freedom to experience a spiritual life.

mertd 13y ago
That is pretty much Maslow's pyramid.
- Sakes 13y ago
  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.
  - mertd 13y ago
    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.
slurry 13y ago
1. No debt is fairly expensive in this world. Either you need a nontrivial income or a fairly high threshold for ascetic living. 2. Full stomach/quenched thirst is trivial if you don't mind tap water and simple starches, but once you add (depending on your taste) a complement of steak, quinoa, fresh fruits, beer and/or wine - then you run into a little money. 3. Warm place to sleep - anywhere near work? public transport? "good" schools (however you define that)? Gets expensive quick. 3bis. Meaningful intimate loving relationships are easier to maintain if you have at least one weekend day off (i.e. don't have to work 2 or more jobs) and have at least a little cash to go out on the town at least once in a while. 4. Sense that I am valuable - to me, this has always been difficult without a modestly good set of clothes, shoes and a haircut. Others don't feel that way (but less than you'd think). But maintaining a personal sense of one's value is at least somewhat correlated with others' sense of ones' value. And others' sense of one's value is never completely monetarily free. 5-6. Freedom to indulge curiosities and spiritual life - on a low income, you'd better be single and childless. And even then, it's a challenge. I very much doubt the average person could fulfill those goals to any degree of satisfaction on less than 50k as a single person in a major metro area, not a ton less in the boondocks, and not much less than double that with a partner or spouse.

mindcrime 13y ago

Obligatory: https://www.youtube.com/watch?v=S63kIH96Bi0 https://www.youtube.com/watch?v=S63kIH96Bi0 "They say money can't buy happiness? Look at the fucking smile on my face".

deleted 13y ago

[deleted]

PavlovsCat 13y ago

Am I wrong to dismiss just about anything that depends on asking people? I don't have good ideas on how to measure happiness, but even the worst of them seems better than asking and leaving it at that.

VLM 13y ago

Another peculiar interpretation of the same data: People segregate strongly by income, and you're happier if your neighbors are wealthy rather than poor. Not just crime but schools and parks and services.

bake 13y ago

The distinction between INCOME and WEALTH here is important, a distinction which the title/thesis of this article ignores. The title implies that simply POSSESSING money (wealth) is positively related to happiness, whereas the survey could only support the claim that EARNING money (income) is positively related to happiness. I would argue that income is a much better proxy for the value a person creates in the world than is wealth (though both are deeply, deeply imperfect). I would much more readily believe a survey which implies 'people who believe they create more value in the world are more likely to be happy'.

tszyn 13y ago

It's really impossible to rate your life numerically in relation to a "best possible life", so in order to give some kind of answer to this vague question, respondents fall back on some quantifiable measure like money. A separate issue is that the question "How satisfied are you WITH your life?" is not the same as "How satisfied are you IN your life?". It's possible to have high moment-to-moment happiness, but have a negative view of one's life; or vice versa. Daniel Kahnemann explains this in this TED talk (13:30): http://www.ted.com/talks/daniel_kahneman_the_riddle_of_experience_vs_memory.html http://www.ted.com/talks/daniel_kahneman_the_riddle_of_exper... He even mentions the Gallup World Poll.

brandonhsiao 13y ago

The survey measures people's self-perceived satisfaction. I have no difficulty believing that richer people think they're happier, but the survey tells little about whether they actually are.

acd 13y ago

People should know that Rotschild owns part of the magazine The Economist. http://en.wikipedia.org/wiki/The_Economist http://en.wikipedia.org/wiki/The_Economist

lsdafjklsd 13y ago

...It buys a WaveRunner

lifeformed 13y ago

I think it's less that "money buys happiness" as it is that "poverty causes unhappiness".

edmondlau 13y ago

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 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.

geezer 13y ago

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.

kimonos 13y ago

This is actually true at some point but there are really genuine happiness that money can't buy like love, friendship, loyalty and trust.

peter_l_downs 13y ago

I hope so.

shmerl 13y ago

What is happiness? It's pretty subjective, therefore the title isn't even proper, since it assumes a generalization.

orasis 13y ago

Notice Japan - they work too damn much to be satisfied with their lives.

ta_monkiner 13y ago

Money can buy the appearance of happiness, but happiness comes from inside, not from outside. It's a skill one can develop. Recommended reading: Matthieu Ricard's book "Happiness: A Guide to Developing Life's Most Important Skill"

dschiptsov 13y ago

Only as means to provide changes in people's lives, not necessarily only your own. It has nothing to do with possessions or consumption, and especially this exhibitionistic, public consumption which is pushed by the media. Giving a new pair of boots or a new jacket to some poor school children in Nepal or India will definitely buy some happiness. New iPad for oneself, of course, won't. A long journey to different lands as a CBT for an addict will buy some happiness, while visiting the most distant and expensive to reach island in Pacific won't. Traveling remote Indian/Nepali/Tibetan villages will buy some happiness, while stupid yoga course won't. I'm mountaineering guide and ex-addict, that's why I know.

chavesn 13y ago

Bypass paywall (maybe the paywall only starts after 1 day?): http://www.google.com/url?q=http://www.economist.com/blogs/graphicdetail/2013/05/daily-chart-0 http://www.google.com/url?q=http://www.economist.com/blogs/g...

DanBC 13y ago

I know that if I had just £1,000 that I'd be a lot happier. I'd be able to focus on recovery rather than all the nonsense that I worry on at the moment.

Vaenae 13y ago

I find the conclusion that there is no cap where more money won't buy you more happiness a bit funny, when there's an explicitly defined cap in the question itself. No amount of money will make you any happier when you've already reached level 10.