Friday, 3 May 2013

Graph of the week: Money really can buy happiness

If in doubt, check it out: 

Source: The Economist; Stevenson, Wolfers (2013): "Subjective well being and income:
Is there any evidence of satiation"



































This is coming from an NBER working paper by Betsey Stevenson and Justin Wolfers, using data from Gallup's World Poll
"Gallup asked respondents around the world to imagine a "satisfaction ladder" in which the top step represents a respondent's best possible life. Those being polled are then asked where on the ladder they stand (from zero to a maximum of 10), and how much they earn. Though some countries seem happier than others, people everywhere report more satisfaction as they grow richer. Even more striking, the relationship between income and happiness hardly changes as incomes rise. Moving from rich to richer seems to raise happiness just as much as moving from poor to less poor. One never really grows tired of earning more."
Greed or common sense? I call common sense. There are a lot of things that make people happy, but affluence seems to be the strongest factor. And by far the largest accumulation of wealth in human history was done after the first Industrial Revolution at the onset of capitalism. Affluence made people happier, more innovative and more inclined towards further progress. It's all about incentives people have, and reaching a higher level of income seems to be the best one. This is what drives modern societies; a desire to innovate, to produce, to fight scarcity and to achieve progress. And no one can do this better than the individual entrepreneurs themselves. 

1 comment:

  1. Studies have been done on this issue. I find the arugument a little silly of course someone with money is going to be more happy than someone thats poor. Its a really a stupid comparison its so obvious. Take a guy with a great job he makes a great deal of money is more than satisfied with his benefits and feels he has a fair degree of job security he lives in a great area affluent suburb in a really nice home theirs no such thing as crime where he lives the schools that his kids attend are great his healthcare plan is great his annual raises are great his promotions are great he has got everything in the world going for him so why would he not feel happy about his life. Compared to a guy that lives in the geto somewhere and has few of the advantages that his much better off counterpart has. It sort of irritates me to even attempt to make a comparsion of two individuals in two totally different situations.

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