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So the point is that 10% more money always makes you a certain amount happier. People trot this out and say "look, once you have a certain amount of money you

So the point is that 10% more money always makes you a certain amount happier. People trot this out and say "look, once you have a certain amount of money you don't get happier by having more!" Why should dollars buy happiness the same way they buy gumballs? It doesn't make any sense. The first gallon of water you have every day is pretty freaking valuable. The 1000th gallon of water you have every day is just about worthless unless you're a farmer. In engineering we use log-log charts to look at how systems respond to a HUGE range of inputs from the very, very slow to the very, very fast. Like filters. You want to know how it looks from 1Hz to 1GHz in a useful way. This is generally done with a Bode plot which is log on both x and y. http://en.wikipedia.org/wiki/Bode_plot http://en.wikipedia.org/wiki/Bode_plot If your plot covers several orders of magnitude (and income is many orders of magnitude) then the most informative way to understand it is by compressing it via logarithm. Here's a good example only on the Y since the company is growing X% per year. http://blogs-images.forbes.com/naomirobbins/files/2012/01/linear_log.jpg http://blogs-images.forbes.com/naomirobbins/files/2012/01/li...

phtrivier 12y ago
> Why should dollars buy happiness the same way they buy gumballs? It doesn't make any sense. Which is precisely the point of the old "money does not buy happiness" adage, isn't it ? Science that says "This 1000ths gallon of water is gonna be as good as worthless" seems to favor the point rather than oppose it. I don't know if "happinness == gumballs" would make "sense" to anyone (I personnaly doubt it), but that's the subtext of a lot of messages in a consumer society (and we're leaving the realm of maths from the realm of politics. Stats 101 vs PolSci 101, all over again, I know, sorry.) As for your graphs, what I was saying is precisely that, unless you've been trained to read graphs (and most people are not), you're going to be "fooled" more easily by the second one, won't you ?
- msandford 12y ago
  > Which is precisely the point of the old "money does not buy happiness" adage, isn't it ? Not the way I read it, really. If money doesn't buy happiness, then the graph should be completely flat right? Or at the very least a uniformly distributed scatter plot? But it doesn't really seem to look that way. While I suspect that there's some truth to the adage, it's definitely not absolute. > Science that says "This 1000ths gallon of water is gonna be as good as worthless" seems to favor the point rather than oppose it. That's not the point. The point is that as you have more of a thing, it takes more to move the needle. EVERYTHING has decreasing marginal utility, and money does too. But I don't think the marginal utility of money ever becomes zero, or goes negative. Do you think that? If so, please start sending me your money so that you can be happier! Here's a great example for you. Raises are nearly always percentages right? Why not just give everyone a $100 a year raise? I mean, that $100 is supposed to be the same to everyone, isn't it? 10% more money increases your happiness approximately the same, no matter what number that 10% increase is applied to. > As for your graphs, what I was saying is precisely that, unless you've been trained to read graphs (and most people are not), you're going to be "fooled" more easily by the second one, won't you ? I think that if you want to understand the way a system works across many orders of magnitude the only way to do so without fooling yourself is to look at a log/log plot. If you don't, only the most extreme change on the plot shows up and all the rest gets compressed into a "straight" line by the vagaries of turning an infinitely variable thing into a finite set of pixels.
- phtrivier 12y ago
  Note that, for the adage, I realise I was thinking about the "Renaud Sechan" version, which roughly translates as "Money doesn't buy happiness, but it helps buying the groceries." ;)

phtrivier 12y ago

> Why should dollars buy happiness the same way they buy gumballs? It doesn't make any sense. Which is precisely the point of the old "money does not buy happiness" adage, isn't it ? Science that says "This 1000ths gallon of water is gonna be as good as worthless" seems to favor the point rather than oppose it. I don't know if "happinness == gumballs" would make "sense" to anyone (I personnaly doubt it), but that's the subtext of a lot of messages in a consumer society (and we're leaving the realm of maths from the realm of politics. Stats 101 vs PolSci 101, all over again, I know, sorry.) As for your graphs, what I was saying is precisely that, unless you've been trained to read graphs (and most people are not), you're going to be "fooled" more easily by the second one, won't you ?

msandford 12y ago
> Which is precisely the point of the old "money does not buy happiness" adage, isn't it ? Not the way I read it, really. If money doesn't buy happiness, then the graph should be completely flat right? Or at the very least a uniformly distributed scatter plot? But it doesn't really seem to look that way. While I suspect that there's some truth to the adage, it's definitely not absolute. > Science that says "This 1000ths gallon of water is gonna be as good as worthless" seems to favor the point rather than oppose it. That's not the point. The point is that as you have more of a thing, it takes more to move the needle. EVERYTHING has decreasing marginal utility, and money does too. But I don't think the marginal utility of money ever becomes zero, or goes negative. Do you think that? If so, please start sending me your money so that you can be happier! Here's a great example for you. Raises are nearly always percentages right? Why not just give everyone a $100 a year raise? I mean, that $100 is supposed to be the same to everyone, isn't it? 10% more money increases your happiness approximately the same, no matter what number that 10% increase is applied to. > As for your graphs, what I was saying is precisely that, unless you've been trained to read graphs (and most people are not), you're going to be "fooled" more easily by the second one, won't you ? I think that if you want to understand the way a system works across many orders of magnitude the only way to do so without fooling yourself is to look at a log/log plot. If you don't, only the most extreme change on the plot shows up and all the rest gets compressed into a "straight" line by the vagaries of turning an infinitely variable thing into a finite set of pixels.
phtrivier 12y ago
Note that, for the adage, I realise I was thinking about the "Renaud Sechan" version, which roughly translates as "Money doesn't buy happiness, but it helps buying the groceries." ;)