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Updated 10:00 AM July 10, 2006




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Study shows why money doesn't bring happiness

The more money you earn, the more time you likely are to spend working, commuting and doing other compulsory activities that bring little pleasure, according to an article in the June 30 issue of Science that provides a novel explanation for why money doesn't bring happiness.

For the article entitled "Would you be happier if you were richer? A focusing illusion," Princeton University psychologist Daniel Kahneman and colleagues, including U-M psychologist Norbert Schwarz, analyze the link between money and happiness, presenting new evidence showing that what they call the focusing illusion affects how people respond when asked how happy they are or how satisfied with their lives.

"When people consider the impact of any single factor on their well-being—not only income—they are prone to exaggerate its importance," they write.

Previous studies have shown, for example, that if people are asked about their marriage or health before they are asked how happy they are with life, their answer to the second question is linked more closely with the first question than if the question order is reversed.

"People do not know how happy or satisfied they are with their life in the way they know their height or telephone number," the authors write. "The answers to global life satisfaction questions are constructed only when asked, and are, therefore, susceptible to the focusing of attention on different aspects of life."

To test the power of the focusing illusion, the authors asked a sample of working women to estimate the percentage of time they were in a bad mood the previous day. Respondents also were asked to predict the percentage of time people with various life circumstances—including no health insurance and close work supervision, along with high- and low-income—typically spend in a bad mood. These predictions were compared to the actual reports of mood provided by respondents with the relevant circumstances.

Respondents overestimated the prevalence of bad mood in general, and grossly exaggerated its prevalence among people with undesirable circumstances. For example, while those with household incomes of less than $20,000 a year reported that they spent 32 percent of the previous day in a bad mood, other respondents predicted that people at that income level would spend 58 percent of their day in a bad mood.

The researchers reviewed several possible reasons why income has a weak effect on happiness, including their own explanation—as income rises, people's time use does not appear to shift toward activities associated with improved affect.

Citing evidence from a nationwide survey conducted recently, the researchers noted that people with greater income tend to devote relatively more time to work, compulsory non-work activities (such as shopping and childcare) and active leisure (such as exercise), and less time to passive leisure (such as watching TV and just relaxing).

"When someone reflects on how more income would change subjective well-being, they are probably tempted to think about spending more time in leisurely pursuits such as watching a large-screen plasma TV or playing golf," write the authors. "But in reality, people should think of spending a lot more time working and commuting, and a lot less time engaged in passive leisure and other enjoyable activities."

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