The more money you make, the happier you will feel. Who knew?
And now, some breaking news: whenever your earnings increase, you feel a bit happier. What, you knew that already? Well, you were ahead of the game. For the established academic view had been that once a person’s income had risen to around £55,000, any further increase did not add to so- called ‘experienced’ happiness.
That ‘ rule’ derived from research published in 2010 by two nobel Prize winners, the economist Angus deaton and the psychologist daniel Kahneman.
They analysed 450,000 responses from a group of 1,000 Americans surveyed by Gallup over the previous two years, who on a daily basis were asked how happy they were feeling. According to this, increases in reported happiness deriving from incremental rises in pay stopped when the subjects had reached an annual income of around $75,000.
Influential
This report has been mightily influential, not least because of the distinction of its authors. It had political implications, too: it was possible for the Left to argue that if there was a ‘ happiness wall’ at £55,000, those on incomes higher than that should not complain if they had to pay a confiscatory rate of tax on their earnings.
Anyway, last week this consensus was shattered by a paper published in Proceedings of the national Academy of Sciences of the United States of America by dr Matthew Killingsworth of the University of Pennsylvania.
dr Killingsworth had created a smartphone app called Track Your Happiness, and this generated no fewer than 1,725,994 responses from 33,391 employed people aged from 18 to 65. These revealed that the subjects continued to register increases in ‘experienced wellbeing’ after their income breached the $75,000 mark — and with no upper limit.
As dr Killingsworth remarked: ‘It’s a compelling possibility, the idea that money stops mattering above that point, at least for how people actually feel moment to moment.
‘But when I looked across a wide range of income levels, I found that all forms of wellbeing continue to rise with income. I don’t see any sort of kink in the curve, an inflection point where money stops mattering. Instead, it keeps increasing.’ To me, this seems stunningly obvious, and the earlier academic consensus profoundly counter-intuitive.
This is not because I have a cynical view of human nature. Money means nothing as a thing in itself (although there is an element, especially among so-called Alpha males, whose sense of status derives from being at the top of the financial heap).
The point is that money addresses our desires in all manner of ways that matter beyond mere egotism: to provide a better life for our children, a more comfortable retirement to our parents, and to give to causes that matter to us (rather than those deemed most worthy by the state).
Dilemmas
Of course, as dr Killingsworth observed in his paper: ‘There is something systematic causing income to matter more for some people’s wellbeing than for others.’
The person who from an early age has wanted to go into the City to make pots of money will have a different outlook on the matter to someone whose ambition was always to be a teacher.
This can lead to some interesting dilemmas; as it did when I was a panellist on a BBC Radio 4 audience participation programme called, precisely, dilemma.
The idea was that members of the audience would put to us difficult decisions in their own lives, and we on the panel would attempt to help with a solution.
In one episode, a question came from an elderly couple who were thinking of changing their wills. They had two sons. One had a well-paid job in the financial services sector. The other seemed to have no regular job at all and had constantly been critical of his brother for being ‘money-driven’.
The parents had originally intended to leave their estate in equal proportions to the two sons, but wondered if it would be better, however tricky, to leave the lot to the son who was much less well-off.
I told them that they should indeed amend their will, but in the opposite way — to give all the money to the son with the job in the City.
I explained that he had clearly demonstrated his affection for financial accumulation, whereas their other son seemed to despise money, and so it would be a kindness not to inflict the stuff on him.
Success
Obviously, I was trying to get a reaction from the audience (I succeeded), but there was a certain logic in my answer, which dr Killingsworth’s research confirms.
Families, as we all know, are especially riven by jealousies about income or wealth differentials, in a way which definitely affects happiness levels.
My mother’s family had a possibly unique way of dealing with it. They had founded a company, J. Lyons & Co, which, before it was engulfed by debt as a result of some ill-judged over- expansion in the 1970s, had been a remarkable success.
But how should that cake — and cakes were what they made, in vast quantities — be divided? They determined, even before the company became profitable, that every male member of the family should receive the same income, regardless of whether he was a director of the family firm or didn’t work at all.
And none of them could own property in their own right. Their homes were owned collectively, and could not be passed on to their children (bad news for my mother, who, being unavoidably a woman, was not a beneficiary of this all-male ‘fund’).
Stephen Aris, in his book The Jews In Business, described this as ‘a bizarre marriage between conflicting ideologies, with arch exponents of the capitalist system yoked together in something approaching a Bolshevik Soviet’.
History tells us that ‘capitalism’, however defined, has delivered more wealth and, indeed, happiness than the other approach. not least because, as dr Killingsworth’s research demonstrates, it accords with human nature.