Wednesday 24 August 2022

More evidence that money can't buy happiness, but it can buy life satisfaction

Back in 2019, I wrote this post entitled "Money can't buy happiness, but it can buy life satisfaction". That was based on research from Swedish lottery winners, which showed that:

...the increase in wealth as a result of an unexpected lottery win was associated with a persistent increase in life satisfaction. Hedonic adaptation didn't occur. However, the lottery win didn't increase 'happiness' or an index of mental health.

This week, I read this 2010 article by 2002 Nobel Prize winner Daniel Kahneman and 2015 Nobel Prize winner Sir Angus Deaton, published in the Proceedings of the National Academy of Sciences (open access), which comes to a similar conclusion. Kahneman and Deaton used data from about 440,000 responses to the Gallup-Healthways Well-Being Index (now called the Gallup-Sharecare Well-Being Index) in 2008 and 2009. The survey collects detailed data on a range of measures of subjective wellbeing, including the Cantril Ladder ("Rate your current life on a ladder scale in which 0 is “the worst possible life for you” and 10 is “the best possible life for you.”), and whether the participant felt each of a range of emotions "a lot of the day yesterday", including enjoyment, happiness, worry, sadness, and whether the participant "smiled or laughed a lot yesterday" (all of the emotional questions have yes or no answers). Kahneman and Deaton combined the positive emotions (enjoyment, happiness, and smiling) into a single score for 'positive affect', and the negative emotions (worry and sadness) into a single score for 'blue affect' (they keep stress separate from the other negative emotions). They then look at how those measures vary by income level.

The results are neatly summarised in Figure 1 from the article:

Notice that the Cantril ladder measure of life satisfaction increases with income across the whole range. In contrast, the measures of emotional wellbeing all increase for low levels of income, but quickly level off, with no further improvements beyond an annual income of between US$75,000 and $100,000. Kahneman and Deaton note that:

The data for positive and blue affect provide an unexpectedly sharp answer to our original question. More money does not necessarily buy more happiness, but less money is associated with emotional pain. Perhaps $75,000 is a threshold beyond which further increases in income no longer improve individuals’ ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure.

So, there you go. Money may be able to buy life satisfaction, but it can't buy happiness. Of course, these results are subject to the convincing critiques of happiness and life satisfaction as measures (for example, see here and here).

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