
Money can buy happiness - mckee1
http://www.economist.com/blogs/graphicdetail/2013/05/daily-chart-0?fb_ref=activity
======
leoedin
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.

~~~
rm999
>I don't really see how this new data contradicts the generally accepted view
(mentioned in the article) that money increases happiness up to a point.

The article shows a logarithmic trend (i.e. doubling your income increases
your happiness by a fixed amount), which is a straight line on the log plot.
This insinuates ( _if_ the trend continues, which is assumed from the results)
that there is no point at which increased income won't make someone happier.

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

These are very different conclusions. The plot isn't really falling
"significantly towards the top of the scale". Log is the correct way of
looking at income, because people consider changes to their income
proportionately to their current income (for example, 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, even though the actual additive amounts are very
different).

~~~
auctiontheory
_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.

~~~
btilly
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.

~~~
billmalarky
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
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.

------
hosh
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
You have misunderstood. They ask people to report their actual income and
their actual life satisfaction.

~~~
hosh
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.

------
mb_72
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
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.

------
edmondlau
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.

------
billyjobob
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
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-
mid...](http://economix.blogs.nytimes.com/2011/04/27/everyone-is-middle-class-
right/?_r=0))

~~~
ig1
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
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_.

------
beering
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)

~~~
bryanlarsen
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.

------
Sakes
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.

~~~
slurry
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.

~~~
aestra
I have no debt and significant savings/investments but that is because I don’t
own a house. We have this social expectation in the USA that one must be a
homeowner or they are nobody or haven't made it. Even those who can't afford a
house have one. I also paid only 12,000 for my small car that is extra fuel
efficient instead of buying an expensive car or SUV even though I could afford
one.

~~~
slurry
Good move. IMHO homeownership is inadvisable where it can be avoided.

------
danielharan
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.

~~~
auctiontheory
US? Mexico?! Ignoring the graph, you want to end up in a company with strong
social services and wealth redistribution - Norway or somewhere similar. The
US is not the best place to be poor.

It also depends who "you" are. Are you black? A woman? Gay? Other countries
may have a relative advantage over the US.

~~~
vinceguidry
The US is still upwardly mobile. If you have any ambition at all, it's
possible to rise. It's not _easy_ , but it's far from impossible.

[http://www.nationalreview.com/article/367903/white-ghetto-
ke...](http://www.nationalreview.com/article/367903/white-ghetto-kevin-d-
williamson)

This article on the poorest county in the US is very interesting, while
they're very poor, it's not like anyone's starving, the food stamp program
seems to support them well enough.

~~~
davidw
Stats actually seem to show that mobility is lower in the US than in the
nordic countries:

[http://en.wikipedia.org/wiki/Social_mobility#Country_compari...](http://en.wikipedia.org/wiki/Social_mobility#Country_comparison)

Of course the US is a very different place, too.

~~~
pedrosorio
Not just lower than the nordic countries but a lot of other countries: "There
is more intergenerational mobility in Australia, Sweden, Norway, Finland,
Germany, Spain, France, and Canada than in the U.S. In fact, of affluent
countries studied, only Britain and Italy have lower intergenerational
mobility than the United States does."

And also: "In spite of this low mobility Americans have had the highest belief
in meritocracy among middle- and high-income countries."

TL;DR: Tell the same lie enough times and people will start believing it.

~~~
n09n
And when enough people believe it, it stops being a lie.

------
scottfr
Abstract of the cited article
([http://www.nber.org/papers/w18992?utm_campaign=ntw&utm_mediu...](http://www.nber.org/papers/w18992?utm_campaign=ntw&utm_medium=email&utm_source=ntw)):

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
Full Paper:
[http://www.brookings.edu/~/media/research/files/papers/2013/...](http://www.brookings.edu/~/media/research/files/papers/2013/04/subjective%20well%20being%20income/subjective%20well%20being%20income.pdf)

~~~
paulovsk
thanks!

------
Aqueous
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.

~~~
oscargrouch
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
yeah, the noble savages are very serene....until you notice the infectious
disease and children and mothers constantly dying in childbirth.

~~~
oscargrouch
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
I agree, work/life balance has gone to shit since the agricultural revolution.

------
volume
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
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.

~~~
rtpg
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?

~~~
adwf
Yeah, it'd be interesting if there was a study on population size vs.
happiness. I imagine there would be an inverse correlation (smaller
population, more happy). But whether you could isolate the cause would be a
different matter.

For example: is Norway happy because they have a small population with
massive, well-managed oil reserves to pay for their social services? Or are
they happy because with a smaller population it's easier to gain a consensus
vote for alternative ways of life (eg. social democracy)? Whereas say, the USA
might always be stuck with a capitalist democracy because the large population
is too big to influence easily.

~~~
Dewie
> For example: is Norway happy because they have a small population with
> massive, well-managed oil reserves to pay for their social services?

The oil reserves don't pay for the social services. Some of the reserves are
spent in the budget, but that is mostly skimming off the "interests", and
there are restrictions put in place on how much you can use (maybe you already
knew this; your wording was a bit ambiguous).

~~~
adwf
Yeah I did, I was just trying to point out a potential difference between
being a rich country and happy vs. a small, politically engaged country and
happy.

------
gruseom
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.

------
raymondh
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.

------
bane
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.

------
dllthomas
_" 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.

------
pyduan
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...](http://economistsview.typepad.com/economistsview/2006/08/the_framing_eff.html)

[2] [http://www.adsavvy.org/the-power-of-framing-effects-and-
othe...](http://www.adsavvy.org/the-power-of-framing-effects-and-other-
cognitive-biases/)

[3]
[http://en.wikipedia.org/wiki/Easterlin_paradox](http://en.wikipedia.org/wiki/Easterlin_paradox)

~~~
acchow
> people care more about how much they earn compared to their neighbors

Evolution should select for this "comparative success" behavior, possibly even
if its _only_ advantage is as a signal for mating.

~~~
ProblemFactory
Regardless of any competitive or status-based desires, income relative to your
neighbours (everyone in your city) is a big part of actual purchasing power.

In most cities, housing prices are based on land value, not construction
costs. And land value is entirely based on demand: what your neighbours are
willing to pay for the same lot.

And most services are priced based on the salaries of your neighbours - the
more you earn relative to them, the more of their time you can afford.

~~~
finnw
This does not necessarily conflict with the diminishing returns theory. If you
are 4x as rich as your neighbours, you will probably want to move to a more
affluent area. At which point you will have richer neighbours (i.e. stronger
competition.) There's a good chance you will again be dissatisfied with your
relative wealth and be motivated to increase it further.

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

------
marquis
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
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."

~~~
DavidWoof
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?

~~~
marquis
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.

~~~
DavidWoof
I'd rather make $100K than $80K. Period. At those ratios, my neighbors just
don't enter into the equation.

Now, I might be uncomfortable making $100K when my neighbors made $400K.
That's an identifiable difference, and it would really mark me as the poor
person in the neighborhood. But a 20% difference from the mean? I wouldn't
even notice it.

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tszyn
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_exper...](http://www.ted.com/talks/daniel_kahneman_the_riddle_of_experience_vs_memory.html)

He even mentions the Gallup World Poll.

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yetanotherphd
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...

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bake
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'.

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

------
dschiptsov
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.

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stanmancan
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.

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VLM
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.

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acd
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)

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11thEarlOfMar
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?

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

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

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quadrangle
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
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.

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chavesn
Bypass paywall (maybe the paywall only starts after 1 day?):

[http://www.google.com/url?q=http://www.economist.com/blogs/g...](http://www.google.com/url?q=http://www.economist.com/blogs/graphicdetail/2013/05/daily-
chart-0)

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Vaenae
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.

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ta_monkiner
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"

------
mindcrime
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"_.

------
PavlovsCat
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.

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brandonhsiao
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.

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ChristianMarks
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.

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

~~~
gjm11
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.)

------
geezer
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.

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DanBC
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.

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

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

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ExpiredLink
Now chart the medication of psychotropic drugs in those countries.

------
dsugarman
satisfaction != happiness

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

------
lsdafjklsd
...It buys a WaveRunner

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peter_l_downs
I hope so.

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

