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Dave – I’d be happy with £50k!

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Bhutan_Gross_National_HappinessDavid  Cameron says a government’s actions could make people “feel better as well as worse” and it was “high time” to recognise that GDP was an “incomplete way” of measuring the country’s progress.

He confirmed that the government was asking the Office for National Statistics (ONS) to devise ways of measuring wellbeing in addition to tracking economic growth so that he could introduce a wellbeing index from next year. France is also considering something similar.

According to the Number 10 website, the ONS will lead a debate called the National Wellbeing Project which will seek to establish the key areas that matter most to people’s wellbeing. Potential indicators include health, levels of education, inequalities in income and the environment.

Finland was recently chosen as the best country in the world to live in using similar indicators. The Organisation for Economic Cooperation and Development has considered using social indicators like average years of schooling, gender wage gaps, participation in voluntary groups, and suicide rates.

Wellbeing, like happiness or satisfaction, is an elusive concept and something economists, among others, have discussed for years. The Buddhist kingdom of Bhutan was the first country to introduce the idea of a Gross National Happiness Index in 2006 (although the KIng had coined the term back in the 1970s).

So it’s not all about money but having some helps. An American economist in the 1970s discovered that people in industrialised countries were getting richer – but they weren’t getting any happier, despite what the American Declaration of Independence might have said. And who said we have a right to be happy anyway?

For those of us who don’t live in “Rooney-world” or bankers-ville, the lowest earners are the ones that struggled with life and our happiness increases until we reach an income of $75,000 or £50,000 a year (about twice the average income in the UK) when it levels off. Once we earn more than that the extra hours we have to work and the difficulty of maintaing a good work-life balance stop us being happier.

The researchers at Princeton said: “More money doesn’t necessarily buy more happiness but less money is associated with emotional pain”. High earners however were more satisfied with life as a whole and the more they earned the more they were pleased with themselves.

However other research shows that when it comes to salary it’s about where you are in the pecking order. For some people it doesn’t matter how much you earn if someone is earning more than you. In experiments such people will accept a lower salary providing they are the top earner.

And yet other research at the University of Illinois shows that while money can make you happy it doesn’t necessarily make you satisfied. Professor Ed Diener said; “Positive feelings are less affected by money and more by what you do day to day”

As I said at the beginning this is an elusive concept to measure. And it may be down to personality which is partly inherited. Keirsey Research confirmed the $75,000 threshold but using their personality questionnaire found the biggest factor in happiness was the person’s personality type. 74% of extraverts are happy compared to 56% of introverts.

Updated 25 February 2011:

Latest statistics from the ONS suggest sleep and bicycles may be involved in being happy!

Updated 2 March 2011: According to a major social research project, Understanding Society, commissioned by the Economic & Social Research Council, Britain’s happiest couples are married, less than 5 years into their relationship,and childless.

The survey will follow the lives of 40,000 households, interviewing 100,000 people over 20 years. It has been described as a “living laboratory of British life”.

According to this survey happiness declines the longer a couple are together and the older they are (these things tend to go together of course) and married couples are happier than co-habiting couples, particularly for better-educated people. And children are happier if their parents are happy.

So happiness = relationship of less than 5 years + both educated to degree level + no children + man is in employment.


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Author: mikethepsych

He says he's a psychologist but aren't we all?

3 thoughts on “Dave – I’d be happy with £50k!

  1. I’m still learning from you, as I’m trying to achieve my goals. I absolutely enjoy reading all that is posted on your website.Keep the information coming. I loved it

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  3. Pingback: Why are we worrying about gender pay differentials? « SGandA on Management & Leadership