money and happiness i. beliefs about importance of money research: two-minded view 1. no: asked to...

Money and Happiness

I. Beliefs about importance of money

Research: Two-minded view

1. No:

Asked to define “good life” or describe determinants of satisfying life -- money not mentioned at all or near bottom (11th of 12).

Don’t believe money has much to do with happiness in final analysis.

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2. Then again, yes:

Focus on own life… what would increase quality of life?

What prevents you from achieving the good life? Money most frequent answer.

True regardless of how much you actually make.

$30,000 say $50,000 will make you happy.

$100,000 say $250,000 will do it, etc…

What is money good for? What is the appeal? What does money provide even if doesn’t make you happy in the long-term?


Two-Minded View

I. Money important in fulfilling basic needs

Survival versus struggle - homeless

Safety & security versus no safety net - insecure -health insurance

Freedom/self control versus few choices - can’t lead life you desire

Self-determination versus can’t express talents, values, etc.

Comfort/entertainment versus distress/boredom - no diversions & R&R

High social status versus low status - feel inferior

Bottom line: Basic needs powerful - fulfillment satisfying.



II. Unraveling the Two-Minded View

Most experience real or vicarious economic distress.

1. Money important for security, comfort, etc.--easy to believe more money increases comfort, control, etc. (Vitamin C) threshold -diminishing returns.

2. Easy to confuse comfort/security with happiness - i.e. necessary but not sufficient conditions to be happy.

3. Easier to look outside than inside the self for happiness/better life.

4. Culture - celebrity culture & how define “doing well.”

Value of Money

1. Helps fulfill basic needs and avoid distress of unfulfilled needs that are critical necessary conditions of good life.

2. Money is necessary but not sufficient condition for happiness.

Foundation for but not basis of

3. “Enough” money brings life to zero/neutral -

psychological & social factors then determine happiness.

Research Summary

- Basic Need / Money Threshold

- Beyond threshold money brings diminishing returns in

increased happiness.

- Over-concern about money source of unhappiness.


Research Evaluating Money-Happiness Connection

II. Between-Nation and Within-Nation Comparisons

1. BetweenCorrelations of r =.50 to .70 between per capita income and

subjective well-being (happiness).Income and happiness not always related – few surprises.

2. WithinSubstantially lower correlations – across 40 countries r =.13United States r =.15Curvilinear relation…money matters most at low income levels.

Highest correlations money-happiness in poor countries.– Calcutta slums of India r =.45– Money and fulfillment of basic needs


Interpreting National Differences

3. Affluent Countries Reach GNP level of $10,000 per year - no relationUnited States - $50,000-60,000 per year - more money

does not increase happiness.

4. Why Between-Within Difference?Between based on money-happiness of two numbers

for each country.Small differences become significant correlations.

Within – average across individuals for single country… picks up all factors other than money that contribute to happiness…e.g., extroversion, optimism., self-esteem…



5. Complication:More than money varies with wealth of nations.Services, freedom, democracy, individual rights, health care, etc…Not clear money is the major factor.

6. Does Increasing Affluence Bring Increasing Happiness?

National Survey Data –1956-1998 – Income up / happiness flat

7.0 on 10-point scale - (1) unhappy to (10) extremely happy

10-fold increase in rates of depression,especially among young.

True for all advanced industrialized countries.

Increases in teen suicide, delinquency, teen pregnancy.



7. Overall

Beyond money necessary to meet basic needs...money largely unrelated to happiness.

Longitudinal studies – for individuals, increased income not related to increased happiness. Decreased, unless dramatic also not related.

8. Do Happy People Make More Money?

• 19-year longitudinal study of college freshmen to world of work. • Happy students make more after graduation? (graph)• Both parental income and student happiness mattered.• Cheerfulness has biggest effect at highest levels of parental

income.

Explanations: Why Happy People Make More Money• 1.Cheerfulness and a can-do attitude…resilience facing

setbacks.• 2. Cheerfulness admired by others – better social skills and

more effective in teamwork situations.• 3. Employers: Two competent people; one cheerful one not.

Cheerful may get job and better performance evaluations. Halo effect.


9. Are Rich People Happier?

Diener, 1985:

-Survey of 100 wealthiest from Forbes list of 400 wealthiest Americans. Minimum net worth $125 million.

5.8 on 1 to 7 scale of happiness versus 5.0 average American.

-Rich reported feeling happy 77% of time.

-Average American reported feeling happy 62% of time.

(Sample picked out of phone book: average net worth $122,000)

-Not all rich are happy: 37% of rich scored lower than average non-rich


III. Why Doesn’t Money Matter More?

1. Genetic Temperament…40-50% of happiness over lifetime may be in your genes.Return to genetically set baseline levels.

2. Adaptation & Hedonic TreadmillLike sensory adaptation…all emotions are not meant to last.Evolution: most sensitive to changes that may be threats.What if fear lasted 6 months…gratification after sex 2

years?



New car effect…only short-term increases, then back to baseline. Have to continually experience increases (treadmill) or don’t get anywhere.

Research: Lottery winners and paralysis victims Brickman, Coates, Janoff-Bulman:Strong adaptation. Lottery winners complicated lives.

Lottery Winners versus Accident Victims

Brickman, Coates Janoff-Bulman JPSP -78Participants: 22 - Illinois lottery winners - from $50,000 to 1 million.19 - accident victims - 11 paraplegics & 18 quadraplegics.Phone interviews.

DV: Happiness, satisfaction & pleasure Past Present Future Everyday

Winners 3.77 4.00 4.20 3.33Controls 3.32 3.82 4.14 3.82Victims 4.41 2.96 4.32 3.48

Other studies: Over time lottery winners often less happythan before winning.


3. Rising Expectations- Always gap between what have and what want.

Each higher level of income brings new expectations.

Yesterday’s wants become today’s needs – never satisfied.

Having a TV, CD player, cell phone, computer any big deal these days?…65% of under-18-years have TV in bedroom…average home has 3 sets…5 pretty common.

- One survey: 84% think good life now includes a vacation home.



4. Social Comparisons

-Keeping up wth Jones….kids.

Relative Deprivation – how much have evaluated by relative not absolute standards - most Americans “rich.”

Do we really need an SUV? - independently decided had to have one?

Get bigger house in neighborhood of big houses…not look so big.

Research Evaluating Social Comparison

Mixed support for social comparison effect on happiness.

1. People with moderate incomes living in wealthy or poorer neighborhoods not differ in happiness.

(Europe, like our states) - Happiness of people living in affluent countries higher if neighboring is also affluent versus poor.


2. Restricted & self-relevant comparisons rather than “any” comparison to those doing better than us…do we compare to Bill Gates…Donald Trump?Not passive victims…choose our comparisons.Make local and personalized comparisons.

At work….most upsetting comparison - result?- Critical variable is self-relevance – does the

comparison involve something that defines your self?Examples: pride in garden & yard versus neighbor

who does better…- Man defines self as primary breadwinner—but

wife makes more or is very successful in charitable organization work…one a threat other not.


5. Materialism and Psychological Basisof Happiness

Money only tangentially related to things known to contribute most to personal happiness…relationships, competence, autonomy, personal expressiveness, personal growth, religion, etc….

- Excessive materialism mortgages happiness.


Evaluate from Self-determination Theory

Not Rich Are RichAutonomy – freely chosen, - imposed by others personally expressive - impress others

- others’ expectations

Competence - effective/growth, - hate job, boring,challenge/change stagnant, just for $$

Relatedness – happy marriage, - unhappy marriagelove, intimacy -few supporting relations - meaningful friendships


The Meaning of Happiness: Relative or Universal?

I. National Comparisons

Only meaningful if same understanding of happiness.

Japan – Mexico – Brazil – U.S. – Canada – Chile – India

Same or different ideas about meaning and importance of happiness? Western bias?



A. Arguments / Data for Universality

1. Happiness as a universal goal

Surveys of college students 42 countries –

69% say happiness & 62% say life satisfaction very important life goals.

2. Language equivalence -Translation does not seem to be problem…

Swiss much higher happiness than French, Germans, & Italians.

All three languages spoken in Switzerland...

Happiness levels unrelated to language spoken.

-Back translations….over and over…

“For” Universality

3. Different measures…global. Faces. ESM, worst & best life…all show same pattern of national differences…how you ask it not matter.

4. Happiness important to quality of life in all societies.

Each may define goals, ways to achieve or basis differently.

Fulfilling culturally-defined goals & values should increase satisfaction (outcome) however goals and values defined in particular culture.


Against Universality

Cultural DifferencesMost research focused on western versus East Asian cultural

differences in self-concept and values.Japan very rich but low SWB…culture or less happy?

Western Conceptions of Self1. Individualism and an independent self.2. Self-concept conceived and lived as separate from others.

Each person possesses traits & personal qualities that define them as unique individuals. Twenty statements test…. “I am”

3. Self definition independent of context and relationships.Same person wherever we go…

4. Squeaky wheel gets the grease - stand out - call attention - stick to your guns…pursue your unique dreams.


Asian Conception of Self1. Interdependent and collectivist conception of self:

Self-concept defined by relationships to others.

I am __________ daughter, citizen, employee, etc.

2. Self defined by context:

I am at work ________ with my parents ________ at school

3. Self-esteem & value heavily dependent maintaining favorable relations with others.

4. Nail that stands up gets pounded down. Fit in, don’t offend by being thinking or showing you are “better” than others.

Follow roles, rules, respectful attitude towards others.


Happiness American Style

1. Cultural idea:Happiness important cultural goal and criteria for making choices,Life liberty and pursuit of happiness…Should be happy/enjoy …….work, friends, marriage, college.

2. Emotional expressiveness:Encourage expressing and following what makes you happy.

3. Pride in individual achievement - stand out - stick to guns.

4. Self-enhancement:Research…feel better than average.Attributions for success and failure.


Cultural message

- Find what makes you happy and go for it…..

- Kids…develop those interests, traits & talents that express your uniqueness and individuality….then you’ll be happy.

- Happiness results from pursuit of individualism.

-Don’t let others compromise or get in way. “Be true to self.”

ResearchMajority of westerners are happy…79-83%

Self-esteem more strongly related to happiness in individualistic than in collectivist cultures. Happiness means happiness with self.


Asian Style of Happiness

1. Cultural ideals:Happiness not a central goal of life. More emphasis on moderation and balance. Unlikely to say “very” happy on SWB measure.

2. Moderation in emotional expression:Eastern philosophy – emotions like weather…sunny then rain.Best not to hold onto them because they are impermanent.Keep composure…don’t lose self in fleeting emotions.Accept what is rather than striving for or trying to avoid happiness or unhappiness.

3. Pride and sensitivity to groups: Higher satisfaction than your group than when individual succeeds.4. Self-critical attitude, humility, and modesty are valued:

Expressing self-critical attitude invites sympathy & support and positive view from others. “If you can’t admit your shortcomings don’t expect sympathy or support from others.”- Nail that stands up gets pounded down


money and happiness i. beliefs about importance of money research: two-minded view 1. no: asked to...

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