Income Determines Level of Happiness
August 15, 2005
(Ivanhoe Newswire) -- Can money buy happiness? Researchers believe those with more money tend to be happier, and say your level of happiness depends upon how much money your peers make.
Glenn Firebaugh, Ph.D, a sociological researcher from Pennsylvania State University in University Park and graduate student Laura Tach from Harvard University in Boston compared whether the effect income has on your happiness stems from the material things money can buy, absolute income effect, or from comparing your income to that of another, relative income effect. While researchers found both absolute and relative income are important, relative was more prevalent in determining one's happiness.
"If income effects are entirely relative, then continued income growth in rich countries today is relevant to how happy people are on the whole," Dr. Firebaugh says. "Rather than promoting overall happiness, continued income growth could promote an ongoing consumption race where individuals consume more and more just to maintain a constant level of happiness."
Using the 1972-2002 General Social Survey, researchers compared the age, total family income and general happiness of those between ages 20 and 64. While they did find relative income to have an effect on one's happiness, physical health was the best indicator of happiness.
"We find with and without controls for age, physical health, education, and other correlates of happiness, that the higher the income of others in one's age group, the lower one's happiness," Dr. Firebaugh says. "Families whose income earners are in jobs with flat income trajectories are likely to become less happy over time. Thus, the relative income effect observed here implies adverse effects for some individuals over the working years of their life cycles."
SOURCE: The American Sociological Association Centennial Annual Meeting in Philadelphia, Pa., Aug. 14, 2005
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