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Science: Money makes you happier

No limit to impact of increased wealth on satisfaction, research finds

By Quentin Fottrell

For those who haven’t won the lottery and have never sold a startup to Yahoo for $30 million, science has long offered a small consolation: At a certain point, earning more money won’t make you happier. But new research debunks such feel-good claims.

There’s no end to how much happier money can make you, according to research to be published in the May 2013 edition of “American Economic Review, Papers and Proceedings” by economists Betsey Stevenson and Justin Wolfers, professors at the University of Michigan. “The relationship between well-being and income is roughly linear-log and does not diminish as incomes rise,” the study — Subjective Well-Being and Income: Is There Any Evidence of Satiation? — concludes. “If there is a satiation point, we are yet to reach it.”

The correlation between increased income and increased happiness is no different with the rich than it is with the poor, the study finds. The “positive association between family income and reported well-being is remarkably consistent and shows no signs of petering out even at very high incomes,” the study reports. This proves as consistent when making cross-national comparisons between rich and poor countries as when making comparisons between rich and poor people within a country, Stevenson and Wolfers conclude.

Specifically, just over one-third (or 35%) of Americans making less than $10,000 reported being “very happy” and just under one-quarter (24%) said they were “very satisfied” with their lives. Of those making over $500,000, 100% reported being “very happy” and said they were “very satisfied” with their lives. Outside the U.S., Stevenson and Wolfers found the same trends. “In particular, there is no evidence that the slope flattens our beyond any particular ‘satiation point’ in any nation,” they wrote.

Why does more money mean more happy days ahead? Wolfers says he leaves that up to others to decide, but he has one theory: “It may be that the relationship is not between your income and the number of iPhones you can buy; it’s about the choices you can make.” And the more money you make, he says, the more choices open up. “But I would never say become a corporate lawyer and not work for a nonprofit if you found that more fulfilling,” Wolfers says.

Money can't buy happiness?  Think again.

A new study finds that for rich and poor alike, as income climbs, so does one’s sense of well-being. Brenda Cronin reports.

Stevenson and Wolfers’s study seems to contradict work in 1974 by economistRichard Easterlin, who argued that economic and happiness data suggested a “paradox” in which increasing income after a certain point did not increase well-being. Easterlin famously wrote that people in poorer countries were happier once they could afford basic necessities. A follow-up study by London School of Economics professor Richard Layardconcluded that above $15,000 per person, “higher average income is no guarantee of greater happiness.”
Easterlin, an economist at the University of Southern California, disputes the new research. “More Money does not make you happier when you look at what happens to people over time as their income trends upward,” he told MarketWatch. “If you compare people at a point in time, those with higher income are typically happier. But you cannot generalize from the point of time relationship to the relationship over time. That is what the Easterlin Paradox is all about.”

Those banking on increased wealth as a path to happiness may be disappointed in other ways: Materialistic people are less happy than those who don’t care about being upwardly mobile, other studies show. Couples who say money is not important to them score about 10% to 15% better on measures of “relationship quality,” meaning they fight less and have more stable relationships, according to a 2011 study of 1,700 married couples by Brigham Young University and published in the “Journal of Couple & Relationships Therapy.” Jason Carroll, lead author of that study, cautions, “income level is different than materialism.”

And Americans have not seen a bump in happiness since the recession. The Gallup-Healthways Well-Being Index, which has surveyed 1.7 million Americans since it began in 2008 and attempts to measure the happiness of residents in U.S. states, found almost no improvement over the past five years, despite signs that the economy is improving. The index asks respondents about well-being, physical and emotional health, work environment, and whether they worried or smiled the previous day. For the four consecutive years, Hawaii came in first and West Virginia came in last.

http://www.marketwatch.com/story/science-money-makes-you-happier-2013-04-30?link=mw_home_kiosk

US Nonfarm & unemployment rate @ 14:30, Asia mixed, US futures flat/red.

Remember LDT today.

Maybe a good thing for investors we had a holiday yesterday with Fed's usual 'may, may-not'-attitude, DOW down with 145 points at one stage with gold, silver & copper taking a beating.  Today much happening with Italian, French, German & Euro PMI from 9:45 - 9:58.  SA Manufacturing PMI @ 11:00, EU interest rate 13:45 and ECB press conference @ 14:30 as well as US Continuing, Initial jobless, Non-farm productivity and Trade Balance at same time. Enough to confuse even the most perceptive trader, luckily we love a challenge.

Edit:

ECB cut 25 basis points (expected) and they are as always 'ready to act' (also expected)

Now we can move forward without 'central bonkers' confusing issues.

You referring to the double top?  I was kind of expecting two strong down days, two strong up days this week, i.e. down, up, down, up all to do with expectation and reality but yes, not so strong after all at least for day one, too many chocolate kisses and utopia promises out there, and don't forget the happy hippies.    I still can't convince myself to go long in this market, rather waiting for ups and short it, and still thinking longer term is down not up.  So I guess we disagree then?

Edit:  Oh, my bad - you're referring to the two events 1st & 2nd.  Me too, waiting and watching - at least we will get some sort of direction then.

Another day in paradise?

09:00  Spanish GDP  Prev -0.8% Exp -0.5%, Act -0.5%
09:55  Ger Unemployment Prev Prev 6.9%  Exp 6.9% Act 6.9%
09:55  Ger Unemployment Change Prev 13K, Exp 2K, Act 4K
11:00  Eur CPI YoY Prev 1.7% Exp 1.6% Act 1.2%
11:00  Eur Unemployment Prev 12.0% Exp 12.1% Act 12.1%
14:00  SA Trade balance -9.52B Exp -8.50B Act 7.77B  Wat sê hulle nou weer van 'n blinde hoender...

so, what did I miss? 

VIX ticking up steadily, $15.15 at this moment.   

Nas and S&P neg since start, Dow just joined neg, all picking up speed.

Signing off, have a good weekend all.