Alicorn comments on My main problem with utilitarianism - Less Wrong

-2 Post author: taw 17 April 2009 08:26PM

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Comment author: Alicorn 17 April 2009 09:01:19PM 0 points [-]

This could be partly a comparison effect. It's possible that rich people are happier than poor people because they compare themselves to poor people, and the denizens of rich countries are happier than the denizens of the Third World because they can likewise make such a comparison. A country that's gaining wealth is gaining countries-that-it's-better-than and shrinking the gap between countries that are still wealthier. If wealth were fairly distributed, it's arguable if we'd have much to show for some flat increase in everyone's wealth, handed out simultaneously and to everyone.

Comment author: mattnewport 17 April 2009 09:09:35PM 3 points [-]

It's certainly possible but the research doesn't seem to suggest that:

If anything, Ms. Stevenson and Mr. Wolfers say, absolute income seems to matter more than relative income. In the United States, about 90 percent of people in households making at least $250,000 a year called themselves “very happy” in a recent Gallup Poll. In households with income below $30,000, only 42 percent of people gave that answer. But the international polling data suggests that the under-$30,000 crowd might not be happier if they lived in a poorer country.

Also:

Two days back I noted that happiness inequality today is at much lower levels than in earlier decades, despite rising income inequality. What lies behind these trends?

More research is needed but the current research doesn't really support the comparison explanation.

Comment author: conchis 18 April 2009 12:10:13AM *  1 point [-]

More research is needed but the current research doesn't really support the comparison explanation.

I think you're over-interpreting the results of a single (and as far as I'm aware as-yet-non-peer-reviewed) paper.

Cross-country studies are suggestive, but as far as I'm concerned the real action is in micro data (and especially in panel studies tracking the same individuals over extended periods of time). These have pretty consistently found evidence of comparison effects in developed countries. (The state of play is a little more complicated for transition and developing countries.)

A good overview is:

  • Clark, Frijters and Shields (2008) "Relative Income, Happiness, and Utility" Journal of Economic Literature 46(1): 95-144. (Earlier version on SSRN here)

For what it's worth, my read of the micro data is that it generally doesn't support the "money doesn't make people happy" hypothesis either. Money does matter, though in many cases rather less than some other life outcomes.

Comment author: mattnewport 18 April 2009 12:22:54AM *  2 points [-]

My claim would be that if the poorest country in the world could be brought up to the standard of living of the US and the rest of the world could have its standard of living increased so as to maintain the same relative inequality, then (to a first approximation) every individual in the world would find their happiness either increased or unchanged. I don't know if anyone would go so far as to claim otherwise but it sometimes seems that some people would dispute that claim.

Comment author: conchis 18 April 2009 12:34:03AM 0 points [-]

Agreed.

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