Saturday, March 24, 2018

Money Can't Buy You Life Satisfaction

Image result for john piippo happy
Store, in Ann Arbor
Berkeley sociologist Amitai Etzioni's Happiness Is the Wrong Metric: A Liberal Communitarian Response to Populism, is available FREE for Kindle.

I'm reading it this afternoon. 

Early in the book Etzioni cites massive sociological date supoorting the idea that increased income adds nothing to life satisfaction, beyond a point.

Here are some quotes.

There is a "rising disconnect between income and happiness."

"The preponderance of the social scientific literature suggests that once income reaches a certain threshold, additional income creates little additional satisfaction." 

"One’s socioeconomic status has a meager effect on one’s “sense of well-being” and no significant effect on one’s life satisfaction."

"Jonathan Freedman discovered that levels of reported happiness do not vary greatly among the members of different economic classes, with the exception of the very poor, who tend to be less happy than others."

"A 2010 study by Daniel Kahneman and Angus Deaton identified the point after which there is less correlation between additional income and additional happiness: $75,000 (Kahneman and Deaton 2010). The study found that while a positive relationship existed between income and life evaluation,3 higher income did not improve emotional well-being4 (See Kahneman and Deaton 2010). Hence, whereas life evaluation rises steadily with increases in income, emotional well-being does not progress once an annual income of $75,000 is reached."

The preponderance of the evidence suggests that income above a certain level does not buy much additional happiness."

Individual happiness seems to be determined by one’s income relative to others, rather than one’s absolute income. One interpretation of this claim is the familiar concept of “keeping up with the Joneses”—an expression that captures the use of goods in a status competition among members of the community. Goods are used as visible markers of one’s standing in this never-ending race. This explains why an increase in a nation’s nation’s collective wealth often fails to increase reported happiness. If practically everyone has three televisions and two cars, owning three televisions and two cars may buy little pride relative to others. Moreover, even very wealthy people can always find someone who earns more than they do. The same factor also seems to explain why people in small towns are happier than those in big cities."