If we change the y-axis to display a linear relationship, this tells a different story. In fact, we see a plateauing of the relationship between income and experience wellbeing, just as found in Kahneman and Deaton (2010), but just at a later point — about $200,000 per year.
Uhh… that shouldn’t happen from just re-plotting the same data. In fact, how is it that in the original graph, there is an increase from $400,000 to $620,000, but in the new linear axis graph, there is a decrease?
A doubling of income is associated with about a 1-point increase on a 0–100 scale, which seems (to our eyes) surprisingly small.
In the context of the previous paragraph (“this doesn’t mean go work at Goldman Sachs”), this seems to imply that rich people shouldn’t get more money because it barely makes a difference, but this also applies to poor people as well, casting doubt on whether we should bother giving money away. I don’t know if it was meant to imply the first point, but it gave me vibes of selectively interpreting the data to support a desired conclusion.
if the figure is showing a subset of the two (i.e. only observations from people who answered both questions) then the z-score means across income levels will be slightly different, depending on who is excluded.
The author (who is an academic) agrees this is a bit weird, and notes “small-n noisiness at high incomes”.
So overall, I see the result as plausible but not super robust. Though note that in alignment with Kahneman/Deaton, Life Satisfaction does continue to increase even as Experienced Wellbeing dips.
Uhh… that shouldn’t happen from just re-plotting the same data. In fact, how is it that in the original graph, there is an increase from $400,000 to $620,000, but in the new linear axis graph, there is a decrease?
So, there was a discrepancy between the data provided for the paper and the graph in the paper itself. The graph plotted above used the data provided. I’m not sure what else to say without contacting the journal itself.
this seems to imply that rich people shouldn’t get more money because it barely makes a difference, but this also applies to poor people as well, casting doubt on whether we should bother giving money away.
I don’t follow this. The claim is that money makes less of a difference what one might expect, not that it makes no difference. Obviously, there are reasons for and against working at, say, Goldman Sachs besides the salary. It does follow that, if you receiving money makes less of a difference than you would expect, then you giving it to other people, and them receiving it, will also make a smaller-than-anticipated difference. But, of course, you could do something else with your money that could be more effective than giving it away as cash—bednets, deworming, therapy, etc.
One thing I would like to add is that I think it is plausible that the results might not be even close to the same if Killingsworth’s study contained responses from folks living in low-income countries. For example, I wouldn’t be surprised if money actually has a much stronger effect on happiness for people earning $500 ~ per year, as things like medicine, food, shelter, sanitation, etc probably bring significantly more happiness than the kinds of things bought by people that earn $400,000+ per year.
Also, even if it does make a small difference (which I find hard to believe at such a low income), you can double, triple, quadruple, etc the income of 100 people earning $500 per year for a lower cost than doubling the income of one person earning $200,000.
Since we can’t directly prove this from Killingsworth’s study — which the blogpost was primarily about — the assumption was that the results would be the same for low-income earners.
Uhh… that shouldn’t happen from just re-plotting the same data. In fact, how is it that in the original graph, there is an increase from $400,000 to $620,000, but in the new linear axis graph, there is a decrease?
In the context of the previous paragraph (“this doesn’t mean go work at Goldman Sachs”), this seems to imply that rich people shouldn’t get more money because it barely makes a difference, but this also applies to poor people as well, casting doubt on whether we should bother giving money away. I don’t know if it was meant to imply the first point, but it gave me vibes of selectively interpreting the data to support a desired conclusion.
Rohin, I thought this was super weird too. Did a bit more digging and found this blog post: https://kieranhealy.org/blog/archives/2021/01/26/income-and-happiness/
The author (who is an academic) agrees this is a bit weird, and notes “small-n noisiness at high incomes”.
So overall, I see the result as plausible but not super robust. Though note that in alignment with Kahneman/Deaton, Life Satisfaction does continue to increase even as Experienced Wellbeing dips.
Nice find, thanks!
(For others: note that the linked blog post also considers things like “maybe they just uploaded the wrong data” to be a plausible explanation.)
So, there was a discrepancy between the data provided for the paper and the graph in the paper itself. The graph plotted above used the data provided. I’m not sure what else to say without contacting the journal itself.
I don’t follow this. The claim is that money makes less of a difference what one might expect, not that it makes no difference. Obviously, there are reasons for and against working at, say, Goldman Sachs besides the salary. It does follow that, if you receiving money makes less of a difference than you would expect, then you giving it to other people, and them receiving it, will also make a smaller-than-anticipated difference. But, of course, you could do something else with your money that could be more effective than giving it away as cash—bednets, deworming, therapy, etc.
One thing I would like to add is that I think it is plausible that the results might not be even close to the same if Killingsworth’s study contained responses from folks living in low-income countries. For example, I wouldn’t be surprised if money actually has a much stronger effect on happiness for people earning $500 ~ per year, as things like medicine, food, shelter, sanitation, etc probably bring significantly more happiness than the kinds of things bought by people that earn $400,000+ per year.
Also, even if it does make a small difference (which I find hard to believe at such a low income), you can double, triple, quadruple, etc the income of 100 people earning $500 per year for a lower cost than doubling the income of one person earning $200,000.
Since we can’t directly prove this from Killingsworth’s study — which the blogpost was primarily about — the assumption was that the results would be the same for low-income earners.