Thanks a lot for writing this up! I feel like having sharp cutoffs in money/happiness correlation is a priori implausible, and the extent to which EAs believed this in the past is some evidence for collective motivated reasoning in our community.
i don’t think it’s totally implausible, at least not if we believe that there is such a thing as basic needs, that people are significantly less happy if those aren’t met, and that a certain amount of money (obviously allowing for some variation) allows one to fulfill them. that said, i think it’s less plausible than a logarithmic relationship, but of course i say that having just read this post …
edit: having thought about it a bit more, i can’t really think of a basic need that has a sharp cutoff—e.g. you’re not either well-nourished or starving, but there are tons of points in between, and at any point money can provide marginal improvements—so now i do think it’s pretty implausible after all.
I think being wealthy can detract from welfare in other ways. Maybe people are more likely to have shallow relationships, be more scrutinized and trust others less because of their wealth. So, it’s possible it would peak, but I guess $75K seems low for this.
Hmm maybe but I sort of disagree with the broader thrust. There are downsides to wealth just like there are downsides to being attractive or smart or having lots of friends or w/e, and for some individuals the downsides are actually bigger than the positives, but I would be surprised if on average the minuses are outweighed by the positives.
I believe this more strongly if you’re ignoring the causally upstream stuff on achieving those outcomes. For example I think it’s more plausible that people who do extreme things to achieve wealth (imagine an investment banker working 80h/weeks) are less happy than demographic twins who chose not to achieve such wealth (similarly people like being extremely attractive but many people find extreme dieting and exercise unfun and steroids might be bad for you). But I would find it quite implausible that people who do broadly similar things to achieve positive outcomes but are more successful at it (or are just born lucky) are on average victims of their own success (or their own luck).
Thanks for the kind words Linch! Yes, I agree with the motivated reasoning point. I found myself pretty attached to the $75,000 anecdote (me being a fanboy for Kahneman probably contributed to this) even though it didn’t feel quite right. Glad that this new paper allowed me to update while still aligning with one of my core beliefs.
I think Killingsworth’s study captures the same idea that motivates me to do the GWWC pledge while being a bit more nuanced than Kahneman & Deaton’s study. I really do hope this new research can enrich the EA community’s view on the relationship between money and happiness.
Thanks a lot for writing this up! I feel like having sharp cutoffs in money/happiness correlation is a priori implausible, and the extent to which EAs believed this in the past is some evidence for collective motivated reasoning in our community.
See some other loose discussion earlier.
i don’t think it’s totally implausible, at least not if we believe that there is such a thing as basic needs, that people are significantly less happy if those aren’t met, and that a certain amount of money (obviously allowing for some variation) allows one to fulfill them. that said, i think it’s less plausible than a logarithmic relationship, but of course i say that having just read this post …
edit: having thought about it a bit more, i can’t really think of a basic need that has a sharp cutoff—e.g. you’re not either well-nourished or starving, but there are tons of points in between, and at any point money can provide marginal improvements—so now i do think it’s pretty implausible after all.
I think being wealthy can detract from welfare in other ways. Maybe people are more likely to have shallow relationships, be more scrutinized and trust others less because of their wealth. So, it’s possible it would peak, but I guess $75K seems low for this.
Hmm maybe but I sort of disagree with the broader thrust. There are downsides to wealth just like there are downsides to being attractive or smart or having lots of friends or w/e, and for some individuals the downsides are actually bigger than the positives, but I would be surprised if on average the minuses are outweighed by the positives.
I believe this more strongly if you’re ignoring the causally upstream stuff on achieving those outcomes. For example I think it’s more plausible that people who do extreme things to achieve wealth (imagine an investment banker working 80h/weeks) are less happy than demographic twins who chose not to achieve such wealth (similarly people like being extremely attractive but many people find extreme dieting and exercise unfun and steroids might be bad for you). But I would find it quite implausible that people who do broadly similar things to achieve positive outcomes but are more successful at it (or are just born lucky) are on average victims of their own success (or their own luck).
Thanks for the kind words Linch! Yes, I agree with the motivated reasoning point. I found myself pretty attached to the $75,000 anecdote (me being a fanboy for Kahneman probably contributed to this) even though it didn’t feel quite right. Glad that this new paper allowed me to update while still aligning with one of my core beliefs.
I think Killingsworth’s study captures the same idea that motivates me to do the GWWC pledge while being a bit more nuanced than Kahneman & Deaton’s study. I really do hope this new research can enrich the EA community’s view on the relationship between money and happiness.