Tuesday, July 6, 2010

Is life satisfaction mainly about comfort?

‘Contrary to both those who say money is not associated with happiness and those who say that it is extremely important, we found that money is much more related to some forms of well-being than it is to others. Income is most strongly associated with the life evaluation form of well-being, which is a reflective judgment on people’s lives compared with what they want them to be. Although statistically significant, the association of income with positive and negative feelings was modest’ (Ed Diener, Weiting Ng, James Harta and Raksha Arora, ‘Wealth and happiness across the world ...’, Journal of Personality and Social Psychology, (99:1), 2010, p. 60. Media reports: here and here.)

In my view this recent article makes an important contribution to understanding of the relationship between wealth and emotional well-being by attempting to disentangle the determinants of life satisfaction and positive feelings. The article, based on data from the Gallup World Poll, suggests that while satisfaction with standard of living has a substantial impact on satisfaction with life as a whole it has little impact on positive or negative feelings (emotions experienced ‘yesterday’).

The study uses satisfaction with standard of living and a measure of whether people own luxury conveniences (TV, computers etc) as proxy measures of fulfillment of material desires. The basic idea is that people learn to desire material goods because of their social situation (including the influence of advertising) and the fulfillment of these desires leads to feelings of well-being. Some groups (e.g. the Amish) seem to be reasonably happy without much income because they have relatively low aspirations for material goods.

The authors link their findings to the distinction that Tibor Scitovsky made between comfort and pleasure (‘The Joyless Economy’, 1978). They suggest that ‘it may be that’ comforts increase life evaluations whereas pleasures increase reports of positive feelings:
‘Comfort comes from having one’s needs and desires continuously fulfilled, whereas pleasures come from fulfilling unmet needs and from stimulating and challenging activities. One source of pleasure according to Scitovsky is social stimulation, which he suggested lies largely outside the realm of economics. Novelty and learning can be sources of pleasure too. Thus, Scitovsky’s reasoning is in accord with our findings that wealth predicts life satisfaction, and social relationships and learning new things predict positive feelings’ p.59 .

I found that passage fairly challenging, but reading it didn’t give me positive feelings. I don’t have too many problems with the idea that being satisfied with your standard of living is closely related to comfort, but there are other factors related to economic activity - such as a sense of achievement - that may also make an important contribution to life satisfaction.

A couple of years ago I attempted to identify how necessary various domains of quality of life are to high satisfaction with life as a whole using data compiled by the Australian Centre on Quality of Life (reported here). The criterion used was the percentage of respondents with high satisfaction with life as a whole among those with low ratings on particular domains of quality of life. The percentages were follows (ranked in order of importance of each domain): personal relationships 10.8%, achieving in life 11.8%, standard of living 12.8%, future security 15.6%, health 15.9%, community connectedness 19.0% and safety 20.3%. The results suggest that ‘achieving in life’ at least as necessary to high life satisfaction for Australians as is ‘standard of living’.

I do not claim that working for money is the only way that people can obtain a strong sense of achievement, but it would be very surprising if this feeling is unrelated to economic activity.

I could also have mentioned the neurological evidence that humans (and rats and presumably other animals as well) get more satisfaction from actively working for a reward than from getting it without doing anything to earn it. (See: Gregory Burns, 'Satisfaction', 2005, pp. 43-45.)


Lorraine said...

You never fail to depress me. Surely there must be some facet of the human condition that lies outside the realm of economics.

Winton Bates said...

Hi Lorraine
What could I write that might cheer you up.
First, our income levels etc don't seem to have much to do with how we felt yesterday.
Second, the strong influence of satisfaction with standard of living on life satisfaction means that people who learn to be satisfied with little can still have high life satisfaction.
Third, there is a lot of evidence that personal relationships have a very strong influence on life satisfaction.
So, I don't think anyone can argue that money is all-important. I think the neurologist, Gregory Burns, goes further in that direction than most economists would want to go when he writes: 'novelty is what the brain really wants and money is the most efficient means to that end' ('Satisfaction', p.37). However,I think that view is worth considering along with Scitovsky's contrary view.