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Sunday, July 02, 2006

Princeton University - Link between income and happiness is mainly an illusion

Despite the weak relationship between income and global life satisfaction or experienced happiness, many people are highly motivated to increase their income," the study said. "In some cases, this focusing illusion may lead to a misallocation of time, from accepting lengthy commutes (which are among the worst moments of the day) to sacrificing time spent socializing (which are among the best moments of the day).

This study shows what I've always suspected: that Americans have been doped into accepting ridiculous work conditions (60-80 hour weeks) in exchange for a marginally higher income than the rest of the industrialized countries, all of whom get at least 5 weeks a year to spend with their friends and family. Even with the meager vacation time they get, Americans don't usually take them. I've had former colleagues brag that they took their sabbatical and started a job at another company so they got 2 salaries at once for 5 or 6 weeks.

I remember at a gathering of friends who asked me how much I would think I'd need to not worry about work again. I answered with a figure well in excess of what most Americans would see in their lifetime, but my friends expressed amazement that I would be satisfied with so little! Granted these were Google old-timers who would turn out to be incredibly wealthy, but all it showed me was that no matter how much money you have, all that does is to raise your standards and tell you that you don't have enough.

But happiness can't be bought, and this study definitely illustrates that the impact of extra money on happiness is highly exaggerated.

2 comments:

md said...

Haven't there been some studies that say people are happier when there is less inequality in the standard of living? Possibly Americans are chasing happiness by trying to decrease the financial offset between themselves and the wealthy people that they see daily in the media (either real people in the news, or fictional characters in TV dramas and comedies, movies, etc). They will probably never get there, but corporations are, I'm sure, quite happy to take advantage of that striving.

In my experience, the isolated worker who does not conform to the overwork ethic is usually the first to get the axe. So it could be fear that drives the majority, as well.

Piaw Na said...

The studies show that people judge themselves and their position by comparing themselves with their neighbors, not in absolute terms. In other words, it doesn't matter if you got a $100,000 raise. If your neighbor got a $200,000 raise, you would be unhappy. It doesn't translate to happiness if everyone was equal, it just means that you'd be comparing yourself based on the ability to spend --- if you were driving a Civic while your neighbor drove a Prius, you'd be unhappy because somehow you knew he was making more money.

I do admit that there is an element of fear in how hard Americans work. Robert Reich pointed out in his book that America is the only modern industrialized country where if you lose your job, you lose everything. You lose your health insurance, you usually lose disability insurance as well, and then of course you lose your income stream because our unemployment insurance run out so quickly. That's definitely a major reason why Americans work themselves to death. Why they don't vote themselves a more sensible lifestyle (like every other industrialized country in the world) is a mystery to me.