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Money Doesn't Make You Happier.....
Generali
Posts: 36,411 Forumite
....but it does make you more satisfied.
http://www.brookings.edu/~/media/research/files/papers/2013/04/subjective%20well%20being%20income/subjective%20well%20being%20income.pdf
It's a brilliant paper and well worth reading in full however to summarise they make 2 points:
1. The Easterlin Paradox is wrong.
2. The modified Easterlin Paradox is wrong.
Good eh?
Ah, yes sorry. What's the Easterlin Paradox you say? Good question.
The unimaginatively named Easterlin Paradox was discovered by a bloke called Richard [STRIKE]Paradox[/STRIKE] Easterlin. He (thought he had) discovered that once peoples' basic needs were met, further increases in income did not lead to greater satisfaction or happiness. This is true across countries.
However, more recent work has shown that this is partly incorrect. This led to the modified Easterlin Paradox. This states that the point at which people stop getting happier isn't when their basic needs are met but at an income point above that but that there is a point. The way this was shown was by demonstrating that for each incremental bit of income, slightly less extra happiness is gained. The leap that was made from there was that eventually the gain in happiness from more income must become zero.
This new piece of work by Betsey and Justin has done what nobody has tried to do before, which if you think about it is pretty obvious. If there is a level of income at which people stop getting happier, what is it? It should be definable and pretty clear, albeit possibly subject to change over time.
When they looked for this mystical level of income at which point extra income doesn't make you happier they found it doesn't exist. Every single extra pound, dollar or yen earned makes you a little bit happier and every single extra pound, dollar or yen on average GDP per head makes the people in a country happier.
TBH I find the thought of this really quite depressing, that increased happiness is to be found in the ceaseless pursuit of money. Oh well.
http://www.brookings.edu/~/media/research/files/papers/2013/04/subjective%20well%20being%20income/subjective%20well%20being%20income.pdf
It's a brilliant paper and well worth reading in full however to summarise they make 2 points:
1. The Easterlin Paradox is wrong.
2. The modified Easterlin Paradox is wrong.
Good eh?
Ah, yes sorry. What's the Easterlin Paradox you say? Good question.
The unimaginatively named Easterlin Paradox was discovered by a bloke called Richard [STRIKE]Paradox[/STRIKE] Easterlin. He (thought he had) discovered that once peoples' basic needs were met, further increases in income did not lead to greater satisfaction or happiness. This is true across countries.
However, more recent work has shown that this is partly incorrect. This led to the modified Easterlin Paradox. This states that the point at which people stop getting happier isn't when their basic needs are met but at an income point above that but that there is a point. The way this was shown was by demonstrating that for each incremental bit of income, slightly less extra happiness is gained. The leap that was made from there was that eventually the gain in happiness from more income must become zero.
This new piece of work by Betsey and Justin has done what nobody has tried to do before, which if you think about it is pretty obvious. If there is a level of income at which people stop getting happier, what is it? It should be definable and pretty clear, albeit possibly subject to change over time.
When they looked for this mystical level of income at which point extra income doesn't make you happier they found it doesn't exist. Every single extra pound, dollar or yen earned makes you a little bit happier and every single extra pound, dollar or yen on average GDP per head makes the people in a country happier.
TBH I find the thought of this really quite depressing, that increased happiness is to be found in the ceaseless pursuit of money. Oh well.
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Comments
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Money Doesn't Make You Happier.....
but it helps you look for happiness in more places
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I would have thought that this is a huge question that brings in all sorts of religious and other philosophies into the debate. For instance three of the 'deadly' sins...............greed, lust envy. The relevance here being that people are not just motivated by a basic level of income but also by comparing themselves with their neighbours?....but it does make you more satisfied.
http://www.brookings.edu/~/media/research/files/papers/2013/04/subjective%20well%20being%20income/subjective%20well%20being%20income.pdf
It's a brilliant paper and well worth reading in full however to summarise they make 2 points:
1. The Easterlin Paradox is wrong.
2. The modified Easterlin Paradox is wrong.
Good eh?
Ah, yes sorry. What's the Easterlin Paradox you say? Good question.
The unimaginatively named Easterlin Paradox was discovered by a bloke called Richard [STRIKE]Paradox[/STRIKE] Easterlin. He (thought he had) discovered that once peoples' basic needs were met, further increases in income did not lead to greater satisfaction or happiness. This is true across countries.
However, more recent work has shown that this is partly incorrect. This led to the modified Easterlin Paradox. This states that the point at which people stop getting happier isn't when their basic needs are met but at an income point above that but that there is a point. The way this was shown was by demonstrating that for each incremental bit of income, slightly less extra happiness is gained. The leap that was made from there was that eventually the gain in happiness from more income must become zero.
This new piece of work by Betsey and Justin has done what nobody has tried to do before, which if you think about it is pretty obvious. If there is a level of income at which people stop getting happier, what is it? It should be definable and pretty clear, albeit possibly subject to change over time.
When they looked for this mystical level of income at which point extra income doesn't make you happier they found it doesn't exist. Every single extra pound, dollar or yen earned makes you a little bit happier and every single extra pound, dollar or yen on average GDP per head makes the people in a country happier.
TBH I find the thought of this really quite depressing, that increased happiness is to be found in the ceaseless pursuit of money. Oh well.0 -
I have always accepted money makes ME happier.
In our current situation more money would be instant gratification....a working heating system, a decent bathroom or two. Real money would mean more choice over our working pattern and dh and I practically getting more time together, which is pretty happy making.
I am really impressed by people who feel they can be just as satisfied with a lifestyle that offers fewer choices (choice is an important part of happiness, or satisfaction I think) and less comfort. It's just not me.0 -
I went to a talk by Ann Widdecombe recently, and one of the wise things she said was not to spend your life obsessing about the people who had more than you, but if anything to think of those who had less.I would have thought that this is a huge question that brings in all sorts of religious and other philosophies into the debate. For instance three of the 'deadly' sins...............greed, lust envy. The relevance here being that people are not just motivated by a basic level of income but also by comparing themselves with their neighbours?0 -
Money gives you more choices in life.
Whether having those choices actually makes you happier is another matter.
You can't take it with you and there are many things in life that money can't buy.
I think that tipping point when extra money makes you happier will differ form one person to another. Some will never be happy regardless of amount others are content with substantially less.
Greed and envy are dangerous bed fellows."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Money gives you more choices in life.
Whether having those choices actually makes you happier is another matter.
You can't take it with you and there are many things in life that money can't buy.
I think that tipping point when extra money makes you happier will differ form one person to another. Some will never be happy regardless of amount others are content with substantially less.
Greed and envy are dangerous bed fellows.
Having money doesn't mean keeping it all necessarily. Money in the bank is a comfort to the scared, but employment, provision of opportunity, support f skill...money supports this too.
I believe I would be a very excellent very rich person. I 'be thought about it a lot:rotfl:0 -
Money doesn't buy happiness, just a more comfortable, better class of misery!
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....but it does make you more satisfied.
http://www.brookings.edu/~/media/research/files/papers/2013/04/subjective%20well%20being%20income/subjective%20well%20being%20income.pdf
It's a brilliant paper and well worth reading in full however to summarise they make 2 points:
1. The Easterlin Paradox is wrong.
2. The modified Easterlin Paradox is wrong.
Aka the 'diminishing marginal utility of wealth' - see utilitarianism, Bentham, Mill, etc, etc....TBH I find the thought of this really quite depressing, that increased happiness is to be found in the ceaseless pursuit of money. Oh well.
Blows quite a big hole in the intellectual arguments in favour of so-called progressive politics as well.0 -
Money doesn't buy happiness but the lack of money makes people's lives much less happy.
It would be nice if we could all find a level at which we were satisfied with our lot but unfortunately, whether unemployed, NMW or millionaire, there's always something just out of the reach of our pocket that we would reaalllly like to have.0 -
I have noticed something like this as the company car park phenomenon.
CEO or MD or whatever pulls up in new BMW 5 series ..feels all satisfied because it is so much better than all the junkers sat next to him..
Work booms and all the chaps go out and buy a new 5 series ...
The original car is the same ..But the owner feels far less satisfaction pulling into his parking place each morning ..and it seems the only way he can scratch this itch is to go and get a new 7 series ..0
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