Photo: flickr
Does an increase in income actually make you happier? A paper by Christopher Boyce, Alex Wood, and Eamonn Ferguson published in the April, 2016 issue of Personality and Social Psychology Bulletin explored this question.
They examined data from a survey of over 100,000 Germans who were surveyed for 8 years. At the start of the survey, participants were given a series of questions to find out their personality characteristics, yearly income, and how income changes affect life satisfaction and whether personality affects the relationship between income change and life satisfaction.
One interesting finding from this survey was that drops in income tended to make people feel a little worse about their lives but increases in income did not significantly lift people’s life satisfaction.
The researches also found that for highly conscientious people, income drops had a bigger impact on life satisfaction than for less conscientious people.
The researchers repeated this analysis on a smaller sample taken from Great Britain, where the results of the previous survey were reiterated.
These results suggest that increases in income are not a significant influence on overall life satisfaction. Losses in income have a bigger effect, because you have to give up things you had before. The well-known phenomenon of loss aversion suggests that people feel losses much more strongly than they feel gains. In addition, losses of income can affect people’s ability to fulfill their responsibilities to others. These losses affect everyone, but they are particularly important to more conscientious people.
If you do suffer a loss in income, there are ways to minimize the impact it has on your overall sense of well-being. Perhaps the most important thing you can do is to connect with your community. People who feel socially connected to others around them feel better about life than those who are isolated. In addition, a strong community will pull together to help people deal with significant needs they may encounter if their income drops.
Category(s):Happiness
Source material from Psychology Today
