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Research Confirms: More Is Better

Research Confirms: More Is Better published on

There’s a nice article in the WSJ Online today reporting on recent research by Betsey Stevenson and Justin Wolfers at the University of Michigan. Their article takes to the task a popular assertion that, above some level of income, more money doesn’t really lead to greater happiness. Of course, that would violate on the basic assumptions underlying this blog. They write:

The income–well-being link that one finds when examining only the poor, is similar to that found when examining only the rich. We show that this finding is robust across a variety of datasets, for various measures of subjective well-being, at various thresholds, and that it holds in roughly equal measure when making cross-national comparisons between rich and poor countries as when making comparisons between rich and poor people within a country.

Moreover, Stevenson and Wolfers also find that the third rule of the blog is also substantiated; namely, more more is less better. Or, to use their terms, “while each additional dollar of income yields a greater increment to measured happiness for the poor than for the rich, there is no satiation point.” That is, someone earning $10,000 may get more sense of happiness from an additional $1,000 than does someone earning $1,000,000, but both experience an increase in well-being in a consistently proportional way.

So who cares? Well, I do for one. Hey, if you’re going to build a blog on a pretty basic concept, it’s nice to have the research back it up (unlike, say, some Keynesian economists).

You should too. Some government policies seem to assume (conveniently so) that once a person has a certain amount of income (call them “rich”), they do not value additional money anymore. Therefore, you can take money away from them and give it to people who do value the additional money (call them “poor”) and make society better off by creating a greater sense of well-being. This utilitarian approach would seem to justify redistributive social policies. The only problem is, it isn’t accurate–or at least it isn’t as simple as that (as the research above shows). And that’s even before taking into account the costly nature (both direct and indirect) of the mechanisms for redistributing the wealth.

So there you have it. No matter how much you make, no matter what country you’re in, more is better than less.

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