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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

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.

pyduan 13y ago
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.
- zanny 13y ago
  I imagine there is a threshold where percentile wealth increases make the ultra-rich happy again. Whenever it grants you a noticeable increase in power and influence to increase your wealth, you kind of want to maximize it to maximize power and influence. There is just a vast gap between the point where you stop spending money for consumption and when you can start spending money for influence.
- auctiontheory 13y ago
  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.
btilly 13y ago
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.
- ars_technician 13y ago
  He didn't say it wasn't enough to survive, it's not enough to really save much if you're living somewhere like SF.
- billmalarky 13y ago
  I could see a family (of even 3) struggling to live a middle class lifestyle on 100K a year in the more expensive cities in America. There's a huge difference between 100K in Tennessee vs 100k in NYC or SF.
  - btilly 13y ago
    This depends on your expectations about what a "middle class lifestyle" includes. Let's take NYC. The fact is that in New York City, the median household income is about $50k/year. (Last year it was $50,895.) So if we define a "middle class lifestyle" as that which those in the middle can afford, well, by definition you're going to get by very well following that lifestyle while making $100k/year! Even if your household has 3 people in it. But if you define "middle class lifestyle" according to the way you think that you peer group is living, well, I've known people making $200k+ who experience "trouble getting by". Now I can understand making more, choosing to live better, and running into financial trouble because of it. But if you do that and blame anyone but yourself, well, I've got nothing in the way of sympathy for you.

pyduan 13y ago

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.

zanny 13y ago
I imagine there is a threshold where percentile wealth increases make the ultra-rich happy again. Whenever it grants you a noticeable increase in power and influence to increase your wealth, you kind of want to maximize it to maximize power and influence. There is just a vast gap between the point where you stop spending money for consumption and when you can start spending money for influence.
auctiontheory 13y ago
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.

btilly 13y ago

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.

ars_technician 13y ago
He didn't say it wasn't enough to survive, it's not enough to really save much if you're living somewhere like SF.
billmalarky 13y ago
I could see a family (of even 3) struggling to live a middle class lifestyle on 100K a year in the more expensive cities in America. There's a huge difference between 100K in Tennessee vs 100k in NYC or SF.
- btilly 13y ago
  This depends on your expectations about what a "middle class lifestyle" includes. Let's take NYC. The fact is that in New York City, the median household income is about $50k/year. (Last year it was $50,895.) So if we define a "middle class lifestyle" as that which those in the middle can afford, well, by definition you're going to get by very well following that lifestyle while making $100k/year! Even if your household has 3 people in it. But if you define "middle class lifestyle" according to the way you think that you peer group is living, well, I've known people making $200k+ who experience "trouble getting by". Now I can understand making more, choosing to live better, and running into financial trouble because of it. But if you do that and blame anyone but yourself, well, I've got nothing in the way of sympathy for you.