Thursday, June 9, 2016

Money and Happiness, Continued

Interesting graph showing the relationship between income and happiness using various definitions of happiness. The two most common measures of "happiness" are "life satisfaction," which means how you feel about your life when you reflect on it, and "affect," which means your mood at the moment. Notice that this whole graph is contained between 5 and 7.5 on a 10-point scale, which shows you that the effect of money is not all that dramatic whatever scale you use. Rising income is correlated with life satisfaction, and the effect does not go away no matter how high an income you have. But money has little effect on your mood from moment to moment.

To me the new and surprising thing about this graph is money has hardly any impact on how stressed people feel; in fact people with very high incomes are slightly more likely to feel stressed than people around the median. Not even a very low income does much to increase your level of stress.

I got this from the career advice at 80,000 Hours. which is quite interesting so far. I especially like their take-down of "following your passion," which includes the graph below:


Thomas said...

I'm not sure you are reading that right regarding the 1-10 scale.

Go to IMDB, for example, a site that lets users rate movies on a scale of 1-10. The top 250 rated movies are in the range of 8.0-9,2. That means the vast majority of movies are probably in the same range. Yet the difference in quality between movies that have a 5.0 rating and a 7.5 rating will be large.

I suppose if it is a surprise that money doesn't make people absolutely happy all the time, then perhaps the upper bound of 7.5 is surprising, but it doesn't seem that surprising to me.

Thomas said...

Sorry by "same range" I mean in the 5 to 7.5 range.

G. Verloren said...

I don't think this is a very good graph. Vaguely labeled axes, weird value scaling, non-zero origins... it's just a confusing mess.

I mean, what the heck kind of metric is "Stress Free"? Humans are essentially never stress free, so it's patently absurd to use such an absolute state as any form of measure. Much more meaningful would be some sort of scale of relative stress as relates to money - but that's simply not what this portrays at all.

There absolutely is a huge difference in stress levels across the poverty line. Living hand to mouth, constantly one crisis away from utter catastrophe, is an indescribeably stressful situation. I don't care how hectic or stressful you think your life is if you're pulling in a solid living wage, the desperation and anxiety that are intrinsic to true poverty completely eclipse anything you have to deal with.

You may hate your job, have an unhappy love life, and even just feel generally unfulfilled as regards your greatest personal passions and dreams, but at the end of the day if you've got a good home, good food, good insurance, stable employment, can afford medical care, and won't have your entire life utterly destroyed if an unexpected $1000 expense suddenly lands in your lap, you aren't experiencing nearly the sort of stress that millions of our nation's poor constantly do.

That's not to say that in such a situation your personal stress doesn't matter for anything - it absolutely does - but objectively it really rates at maybe a 5 or a 6, rather than at a 9 or a 10. But of course, most people self-reporting their own stress levels probably don't have that kind of general awareness of how their own troubles measure up to those of other people.

karlG said...

Looks like the three blue lines level off just around the median income.
What makes "life satisfaction" different?