Principle #5 – The wealth-happiness correlation distortion

Would you be happier if you were wealthy? You may be able to guess the answer from the title, but let’s consider the following:

“As a person’s levels of wealth increase, their feelings of compassion and empathy go down and their feelings of entitlement, deservedness, and ideology of self-interest increases.”

“With increased self-focus and increased control (which are correlated to higher levels of wealth) you become less attuned to other people in your environment, less cooperative, less ethical, a whole slew of other things.”

“Lower income households give proportionately more of their incomes to charity than higher income households. So, proportionately speaking, the less well-off you are, the more charitable you are.”

– Paul Piff, Ph.D., Assistant Professor of Psychology and Social Behavior, UC Berkeley

(parenthetical added to clarify context)

and

“It does have, consistently, in experiment after experiment, a positive affect on your happiness to spend on somebody else.”

“Spending money on yourself doesn’t do much for you, and spending on other people seems to have an impact on how happy you are.”

– Michael Norton, Ph.D., Harold M. Brierley Professor of Business Administration, Harvard Business School

So, what do we learn? If increasing wealth leads to less charitable giving, and spending money on others tends to increase happiness, then does increasing wealth actually decrease happiness? Mo money, mo problems…

He who loves money will not be satisfied with money, nor he who loves wealth with his income; this is also vanity. – Ecclesiastes 5:10 (esv)

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