I’ve always thought more money buys more freedom but I’ve also accepted the money / happiness correlations, or more properly the lack thereof that have been the subject of quite a bit of recent research. I recently reviewed a copy of a forthcoming book that makes one think real hard about whether or not one really wants to be wealthy. It’s did not paint a pretty picture of the lives of the rich.
Much has been made of the fact that poor Latin American countries often rate as high or higher on happiness scales as rich countries like Japan or the U.S. GDP and happiness are not generally well correlated above a certain level. I have encountered claims that after a certain level of income was reached, generally pretty low and little more than enough to ensure you could afford the basic comforts of life, higher income doesn’t correlate well with more happiness. I know the research is unsettled and recently I’ve come across something that suggests things aren’t as simple as is frequently reported.
Two researchers, Daniel Kahneman and Angus Deaton, analyzed a large amount of data from the 2008 / 2009 U.S. Gallup-Healthways Well-Being Index and have produced some interesting observations. This is U.S. data only but I suspect it applies globally as well. The GHWBI survey measures two different psychological factors:
- Daily emotional well-being (enjoyment, happiness, sadness, anger, worry, stress, etc.)
- Overall Life Satisfaction
Interestingly income in the U.S. affects daily emotional well-being (enjoyment, happiness, sadness, anger, worry, stress) up to about $75,000 of household income. That’s not exactly a subsistence level of income and is significant in that 2/3 of U.S. households are below that level. This indicates an increase in stable income would positively impact 2/3 of U.S. households in their day-to-day happiness levels.
The other indicator of overall life satisfaction is even more heavily correlated with income levels. Life satisfaction continues to show strong increases in the U.S. up to household incomes of at least $160,000. To understand the difference between the two think about how you might report you’ve been stressed or worried daily for the past few days, but you are very satisfied with your life right now. People who raise children have higher life satisfaction levels but they have lower daily emotional well-being levels than those who have no children. Raising children makes you less happier on a daily basis, but makes you more satisfied with your life. I don’t think that surprises too many parents.
I’m not sure what all this means but it should give us pause before unthinkingly repeating that money doesn’t buy happiness because clearly it does. At least in some ways that are more nuanced than the simplistic claims some, including myself, have made. I suspect a poor Costa Rican may be as happy as a middle-class Japanese but a middle-class Costa Rican is probably happier than a poor one. Much of how we feel unfortunately is related to how we view ourselves relative to those around us. It’s hard not to notice what cars your neighbors drive and what kind of homes they live in.
You have to be careful about assuming that a correlation means a cause and effect relationship. Maybe happiness causes incomes to rise or something else causes both.
Also At the risk of being politically incorrect I will make an observation about Hispanics in my city of residence – Houston, TX, that may say something about Latin Americans and happiness. There is a very large Hispanic population here and there is a very large park that is densely wooded and has large undeveloped areas (no roads or facilities) near my home. I love to visit this park to get my nature fix in the more remote areas. It’s best to visit during the week as there are very few people there. However, when I go on weekends or holidays and as I drive through the picnic areas the park is usually packed with Hispanic groups that appear to be made up of extended families and/or friends. I’m always struck by how happy they look and how much fun they are having while I drive by in my nice car – alone. In the end I think they may be holding the most important key to real happiness.
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