13 September 2023
Study finds money can buy more than happiness
Increasing incomes for the poorest in society has a well-known positive effect on overall levels of wellbeing.
But, according to a new study, increased income might also have significant benefits for wellbeing inequality by reducing the variance between the number of people who class themselves as very unhappy and those who identify as very happy.
And, by reducing this wellbeing inequality, researchers argue that policy-makers have a targeted means to help reduce levels of extreme unhappiness rather than simply lifting average levels of wellbeing.
The findings were revealed in a new study, The Anna Karenina income effect: Well-being inequality decreases with income, co-authored by Dr Bouke Klein Teeselink, of King’s College London, and Professor Gal Zauberman, of Yale University.
The researchers said: “Given the central role of inequality in many contemporary policy debates, it somewhat surprising that wellbeing inequality does not feature more prominently in such discussions. One potential reason is that wellbeing, in contrast to income, cannot be directly transferred from one individual to another.
“However, policy makers can still influence the wellbeing distribution by steering the underlying determinants. Our research suggests that raising the incomes of the poor may indeed be a good starting point for policy makers who care about wellbeing equality, and in particularly about eliminating the share of those at the lowest levels of wellbeing.”
Researchers drew on more than two million responses from the Gallup-Share Wellbeing Index, which contained millions of interviews with people gathered between 2008-2019.
The study, published in the Journal of Economic Behaviour and Organisation, can be read in full here.