Ttwo Princeton professors, economist Alan B. Krueger and psychologist and Nobel laureate Daniel Kahneman, in collaboration with three others from other universities (psychologists David Schkade of the University of California-San Diego, Norbert Schwarz of the University of Michigan and Arthur Stone of the State University of New York-Stony Brook) are reporting something quite interesting:
While most people believe that having more income would make them happier, Princeton University researchers have found that the link is greatly exaggerated and mostly an illusion.
People surveyed about their own happiness and that of others with varying incomes tended to overstate the impact of income on well-being, according to a new study. Although income is widely assumed to be a good measure of well-being, the researchers found that its role is less significant than predicted and that people with higher incomes do not necessarily spend more time in more enjoyable ways.
… The new findings build on their efforts to develop alternative methods of gauging the well-being of individuals and of society. The new measures are based on people’s ratings of their actual experiences, instead of a judgment of their lives as a whole.
The study is being published in Science, in the issue dated 30 June 2006. Here’s the abstract:
The belief that high income is associated with good mood is widespread but mostly illusory. People with above-average income are relatively satisfied with their lives but are barely happier than others in moment-to-moment experience, tend to be more tense, and do not spend more time in particularly enjoyable activities. Moreover, the effect of income on life satisfaction seems to be transient. We argue that people exaggerate the contribution of income to happiness because they focus, in part, on conventional achievements when evaluating their life or the lives of others.