Tag Archives: Income

Yes, more money will always make your life better, but that’s not all there is to happiness, says new study

In a twist that’s bound to surprise nobody, a new study finds that there isn’t actually any limit past which more money won’t make you happier. Yes, that sounds disheartening, but the authors also caution that it’s not the only thing that makes us happy by a long shot. Chasing money at the expense of everything else might actually make us less happy.

Image credits Mabel Amber.

The relationship between wealth and happiness has always fascinated researchers. One widely-known bit of research in the past suggested that the magic number is $75,000 per year. You won’t gain more happiness by gaining more than that, it added. But if you’ve had to bear through the pandemic jobless or in a job you hate but had to take, struggling to make ends meet, while watching rich people ‘suffer’ in mansions with gardens or spending their holidays on private islands, you might not put too much stock in that idea.

New research agrees with you.

The more the merrier

“[The relationship between money and well-being is] one of the most studied questions in my field,” says Matthew Killingsworth, a senior fellow at Penn’s Wharton School who studies human happiness, lead author of the paper. “I’m very curious about it. Other scientists are curious about it. Laypeople are curious about it. It’s something everyone is navigating all the time.”

Killingsworth set out to answer the question with a wealth of data. The technique he used is called experience sampling, and it involves having people to fill out short surveys at random times of the day. These serve as ‘snapshots’ of their feelings and moods over time, and how these fluctuate.

All in all, he collected 1.7 million data points (‘snapshots’) from more than 33,000 participants aged 18 to 65 from the US through an app called Track Your Happiness that he developed. This allowed him to obtain measurements from each participant a few times every day, with check-in times being randomized for each participant. These were measured on a scale ranging from “very bad” to “very good”, and every participant also answered the question “Overall, how satisfied are you with your life?” (on a scale of “not at all” to “extremely”) at least once. These all measured evaluative well-being, he explains.

“It tells us what’s actually happening in people’s real lives as they live them, in millions of moments as they work and chat and eat and watch TV,” he explains.

But the study also tracked experienced well-being by asking about 12 specific feelings. Five were positive — confident, good, inspired, interested, and proud — and seven negative — afraid, angry, bad, bored, sad, stressed, and upset. Two other measures of life satisfaction collected on an intake survey were also factored in here. Evaluative well-being measures our overall satisfaction with life, while experienced well-being indicates how we feel in the moment.

All in all, Killingsworth says the findings suggest that there is no dollar value past which more money won’t matter to an individual’s well-being and happiness.

“It’s a compelling possibility, the idea that money stops mattering above that point, at least for how people actually feel moment to moment,” he adds . “But when I looked across a wide range of income levels, I found that all forms of well-being continued to rise with income. I don’t see any sort of kink in the curve, an inflection point where money stops mattering. Instead, it keeps increasing.”

“We would expect two people earning $25,000 and $50,000, respectively, to have the same difference in well-being as two people earning $100,000 and $200,000, respectively. In other words, proportional differences in income matter the same to everyone.”

Killingsworth used the logarithm of a person’s income, rather than the actual income, for his study. In essence, this takes into account how much money someone already has. This approach means that rather than being just as important for everyone, each dollar will matter less the more a person earns.

He found that higher earners are happier in part because they feel more in control over their life. More money means more choices, options, and possibilities in regards to how we live life and spend our time, as the pandemic brutally showed. Someone living paycheck to paycheck will have less autonomy over their choices than someone who’s better-off — such as not having to take any job, even if you dislike it, due to financial constraints. Still, in Killingsworth’s eyes, this doesn’t mean we should chase money, and I feel the same way.

“Although money might be good for happiness, I found that people who equated money and success were less happy than those who didn’t. I also found that people who earned more money worked longer hours and felt more pressed for time,” Killingsworth explains.

“If anything, people probably overemphasize money when they think about how well their life is going. Yes, this is a factor that might matter in a way that we didn’t fully realize before, but it’s just one of many that people can control and ultimately, it’s not one I’m terribly concerned people are undervaluing.”

He hopes the findings bring forth more pieces of that ever-elusive puzzle: what exactly makes us happy? Money definitely plays a part, but, according to the findings, only “modestly”, Killingsworth explains.

The paper has been published in the journal PNAS and on the Penn State University’s blog.

Our happiness is more dependent on money today than in the 70s and 80s

With socioeconomic factors being increasingly polarizing in today’s world, the link between wealth and happiness is stronger than ever, researchers find.

Image via Wikimedia.

A new study from the San Diego State University (SDSU) reports that the link between indicators such as income and education and happiness has been growing ever stronger during the last few decades.

According to the findings, the more income someone has, the happier they’re likely to be. Unlike previous findings in this area, however, the authors didn’t find this effect plateauing at a yearly income of about $75,000.

Happy Franklins

“I was surprised that income was so strongly related to happiness and that happiness didn’t plateau at higher levels of income,” said SDSU psychologist Jean Twenge, one of the study’s two authors. “More money seems to equal more happiness, even after basic needs are met.”

The two authors used data on 44,198 U.S. adults age 30 and over in the nationally representative General Social Survey (gathered from 1972 to 2016).

As a rule of thumb, people with higher incomes in the study reported greater levels of happiness and life satisfaction. This trend has been growing stronger since the 1970s and ’80s, the authors report. In other words, money today seems able to buy more happiness than it did in the past.

These trends also lead to a growing happiness divide. White Americans with no college education saw a drop in happiness after the year 2000, while white Americans with a college degree saw steady levels. For black Americans with no college education, happiness levels have remained steady over the same timeframe, while those with a college degree saw higher levels of happiness.

“We’re not exactly sure why there’s a growing divide in happiness, but it might be because of growing income inequality. The rich are getting richer and the poor are getting poorer,” said Twenge.

Such findings tie into other research which uncovered growing levels of ‘despair‘ among working-class white Americans, Twenge adds. While economic woes could be the root of the issue, another explanation could lie in decreasing rates of marriage. These used to be pretty similar across different socioeconomic groups in the US, but has been steadily dropping among lower-income individuals (and married people tend to report higher levels of happiness on average).

Another take on the matter could be that money buys security, comfort, and quality healthcare, all of which lead to a happier life.

Taken at face value, the findings help showcase just how important economic factors are for our well-being and satisfaction in life. A more concerning implication is that happiness today is increasingly a perk of the rich, which does not bode well for the health of our societies. So stay in school kids and make it rain — it’s the basis of a happy life.

The paper “The expanding class divide in happiness in the United States, 1972–2016” has been published in the journal Emotion.

Make art not money

Riches make your happiness about yourself, a tight budget makes it about others

Money doesn’t buy happiness, but it does seem to make it all about yourself, new research found. People with high incomes were found to experience more emotions associated with happiness that are focused on themselves. By contrast, those with lower incomes were found to derive happiness more from their relationships and interactions with other people.

Make art not money

Image credits Daria Nepriakhina.

If there’s one thing everyone will agree on, it’s that having money is a lot better than not having money. Higher income has many proven benefits, from better health to higher life satisfaction. However, there isn’t a clear answer to whether folk wisdom was right that ‘money doesn’t buy happiness’ — yet. So a new paper, lead-authored by Paul Piff, PhD at the University of California, Irvine, looked into how money and happiness tie together.

“Most people think of money as some kind of unmitigated good,” said Piff. “But some recent research suggests that this may not actually be the case. In many ways, money does not necessarily buy you happiness.”

The happiness gap

The team used a survey to quiz 1,519 Americans on their household income and a series of other factors, designed to measure their tendency to experience seven emotions which are believed to make up the foundation of happiness: amusement, awe, compassion, contentment, enthusiasm, love, and pride. The questions were designed to be neutral, so as not to influence the answers. Compassion, for example, was gauged with statements such as “nurturing others gives me a warm feeling inside”.

Crunching the data revealed that well-off participants tended to experience more of the emotions that focus on one’s self — specifically, contentment and pride. Amusement was also tied to socioeconomic status, but more loosely. Surveyees on the lower end of the income scale were more likely to experience emotions that focus on other people, especially compassion and love. Awe was more prevalent among them than in the first group, as was experiencing beauty. Lastly, the team reports that income had no apparent effect on enthusiasm.

“These findings indicate that wealth is not unequivocally associated with happiness,” says Piff. “What seems to be the case is that your wealth predisposes you to different kinds of happiness.”

“While wealthier individuals may find greater positivity in their accomplishments, status and individual achievements, less wealthy individuals seem to find more positivity and happiness in their relationships, their ability to care for and connect with others.”

He believes these differences are borne from higher-income individuals’ aspirations for independence and self-sufficiency. On the other hand, aspects of happiness that center on others help lower-income individuals to form tighter, interdependent bonds with others. This tightly-knit group helps them, in turn, to cope with their less stable, more threatening environment.

According to Piff, poverty “heightens people’s risks for a slew of negative life outcomes, including worsened health,” so any support a community or group can provide is welcome. Wealth doesn’t guarantee happiness, far from it, but the findings suggest that it changes how we experience it at the very least — for example taking joy in “yourself versus in your friends and relationships,” which aligns well with previous research on the subject.

“These findings suggest that lower-income individuals have devised ways to cope, to find meaning, joy and happiness in their lives despite their relatively less favorable circumstances,” he concludes.

The findings are actually kind of a bummer, if I may use a technical term, especially considering that over 43 million people live under the poverty line in the US alone. The income gap is even more abysmal when looking at the whole world, and is still growing according to Inequality.org, a project which has been tracking inequality throughout the world since 2011. That’s a lot of people who have to find “ways to cope, to find meaning”.

And no, it’s not about ‘working hard.’ The single most meaningful factor deciding your socioeconomic status for life is having the right parents.

The paper “Wealth, Poverty, and Happiness: Social Class Is Differentially Associated With Positive Emotions” has been published in the journal Emotion.

Fast Food.

It’s not just the poor: all Americans eat fast food about as often

If there’s a common denominator for every American today, it’s got to be fast food, researchers report. Everyone is having a bite, regardless of socio-economic background.

Fast Food.

Popular wisdom says that the poor gorge on fast-food and the rich dine on fine, healthy courses. There is definitely a kernel of truth to this stereotype, as fast food is usually very cheap, feels like a filling meal as it’s high in fats and salt, so it seems a good deal. For people who don’t have the shops or (especially) time or to ensure they get a healthy, balanced diet, fast food seems like a viable alternative — but it’s actually a barren wasteland from a nutrient point of view.

But the stereotype needs to be revisited, according to a team from the Ohio State University and the University of Michigan-Dearborn. Following a nationwide study of young baby boomers, they report that middle-income Americans are the most likely socio-economic group to eat fast food. There was only a relatively small difference between them and the other groups, however, suggesting that everyone bites in — even the richest people were only slightly less likely to report eating fast food.

 

Fast food, wide reach

“It’s not mostly poor people eating fast food in America,” said Jay Zagorsky, co-author of the study and research scientist at The Ohio State University’s Center for Human Resource Research.

“Rich people may have more eating options, but that’s not stopping them from going to places like McDonald’s or KFC.”

Zagorsky worked on the study with Patricia Smith of the University of Michigan-Dearborn. They used data from the National Longitudinal Survey of Youth, a survey conducted y Ohio State’s Center for Human Resource Research which has been questioning the same group of randomly selected Americans from 1979 to today.

The team drew on data from around 8,000 people who were questioned on their fast-food consumption in 2008, 2010 and 2012 as part of the survey. The surveyees, who were in their 40s and 50s at the time they answered the questions, were asked how many times they had eaten “food from a fast-food restaurant such as McDonald’s, Kentucky Fried Chicken, Pizza Hut or Taco Bell” in the past week.

The results were compared to the participants’ reported income and wealth. All in all, 79% of respondents ate fast food at least once and 23% ate three or more meals during any one of the weeks recorded in the study. While the team did find some slight differences in how fast-food consumption related to both self-reported indices, Zagorsky says that the results were statistically similar.

In one analysis of the data, the team divided the participants into 10 groups based on income. Around 80% in the lowest bracket, 85% of those in the middle (brackets 4 and 5), and about 75% in the highest bracket reported eating fast food least once in the last week. Some pretty consistent numbers overall.

A similar pattern emerged when the team looked at the number of fast-food meals eaten during the three weeks of the study. People in the lower bracket ate 3.6, those in the middle brackets ate 4.2, and those in the highest bracket ate 3 fast food meals during this timeframe.

The team also found that people whose income or wealth changed significantly since 2012 (either for good or for worse) didn’t actually change their eating habits.

So what does matter?

One defining feature of those who relied heavily on fast food for their meals was a lack of time — or time poverty. The authors report that fast food eaters tended to have less leisure time and were more likely to work — and work more hours — than their counterparts.

Another surprise find represented one very select group of people. The team reports that in 2008, 10 respondents claimed to eat only at fast-food restaurants, as did five people in 2010, and two in 2012. Given that the total sample was of 8,000 people, it’s likely that there are only a few people in the US who only eat fast food for longer periods of time.

Still, the study is not without limitations. First, participants were asked if they ate fast food, not what they ate. Some fast food restaurants do carry healthier options such as salads, or non-food items such as coffee. The study included only people in their 40s or 50s, so the findings should be taken with a pinch of salt when expanding to other age groups.

But all in all, the study is a good starting point for policy designed to fight obesity or improve the overall nutrition of the average American consumer.

“If government wants to get involved in regulating nutrition and food choices, it should be based on facts. This study helps reject the myth that poor people eat more fast food than others and may need special protection,” Zagorsky said.

The full paper “The association between socioeconomic status and adult fast-food consumption in the U.S.” has been published in the journal  Economics & Human Biology.

The US doesn’t want poor people: concentrated poverty rises for the first time since the ’90s

Concentrated poverty is on the rise in the US again, with the number of neighborhoods where 40% or more of the population lives below the federal poverty levels of all races increasing for the first time since the 1990s, Penn State demographers report.

Venice Beach, California.
Image credits Thomas Galvez / Flickr.

While general poverty levels only look at how many people live on less than a standard income in a particular place, the concept of poverty concentration takes into account how poverty is spread out throughout an area. Poverty on its own is really bad news, but concentrated poverty makes things a lot worse for everyone — it’s a cascading effect of ever-less money available in the community, meaning health services, educational services, and other civic institutions work with reduced efficiency or grind down altogether. Concentrated poverty amplifies the poor’s struggle by making society around them poorer, less able to help, in a self-reinforcing cycle.

And it’s on the rise in the US for the first time in two decades, warns John Iceland, a professor of sociology and demography at Penn state and research associate at the Population Research Institute. Using data gathered by the U.S. Census Bureau from 1980-2000 and data gathered through the American Community Survey from 2000-2014, the team says concentrated poverty, which saw a rise in the 1980s and gradually eased during the 1990s, is making a comeback throughout all demographics in the US.

Iceland points to growing residential separation and isolation of the poor from the rest of American society in metropolitan areas, as well as an overall increase in poverty since the early 2000s as the biggest factors driving this rise.

“I personally was curious about this volatility — what explains it? Why did we see this increase in the 1980s and the decline in the 1990s and why has it been rebounding?” said Iceland.

“As a social demographer, I’m particularly interested in the changing composition of people living in certain neighborhoods and what types of broad population processes help explain the general trend.”

New neighborhoods

Shepard, Columbus, Ohio.
Image credits Brandie / Flickr.

Not only is the US experiencing a rise in concentrated poverty levels, but it’s also undergoing a shift in who and where is getting the worst of it. The authors note that the demographics, as well as the location of high-poverty neighborhoods, has changed since the 1990s.

“It used to be thought of as black, inner-city poverty, but now more Hispanics and a higher proportion of whites are living in high-poverty neighborhoods,” Iceland said. “They are less likely to be just in the inner core of cities, but oftentimes in inner suburbs.”

“We find that changes in the segregation of the poor explained the largest share of the change in concentrated poverty over most of the time period, with the exception of the 1990s, where the plunge in both black and white poverty rates had the largest role in explaining the considerable decline in concentrated poverty in that decade for both groups.”

Poverty and poverty concentration are different concepts but it’s possible the two are related, Iceland added. Working together with sociology and demography graduate student Erik Hernandez, Iceland also looked at how fluctuations in overall poverty affected its concentration throughout the US.

“There could be a certain percentage of the population in a country that is poor, but what the concentration of poverty looks at is to what extent are they concentrated in relatively few neighborhoods,” he said.

They found that poverty concentration followed the trends set by overall poverty. The country’s recent economic hardships, such as the 2006-2008 recession, has pushed up individual poverty, neighborhood-wide (social) poverty, the overall percentage of people and that of poor people living in high-poverty neighborhoods, the researchers said.

In the 2000s, some 20.5% of poor blacks lived in high-poverty neighborhoods, a figure which increased to 23.1% between 2010 and 2014. For poor non-Hispanic whites, that number went from 5.8% to 8.2% during this time. Overall, the total percentage of poor Americans living in high-poverty neighborhoods went from 11.4% to 14.1%. This concentration can affect governmental services — health, police, education — as well as limit job opportunities, further impoverishing those living in the affected areas.

“A lot of resources are tied to neighborhoods — the quality of schooling and the amount of a school’s economic resources vary across neighborhoods, for example,” said Iceland.

“People have talked about how there’s more crime and social disorganization in places with high poverty levels. And this all has consequences for quality of life.”

The full paper “Understanding trends in concentrated poverty” has been published in the journal Social Science Research.

Money can’t buy happiness the saying goes; but it does buy a longer life, Harvard replies

The richest American men may live up to 15 years longer than the poorest ones, and the richest women 10 years more than their poorest counterparts, a new study found.

More as in years of life. Oh, and “Santa” as in crippling economic inequality.
Image via behance

Life becomes a whole lot better and easier when you have wads of cash to throw at your problems until they go away — but also way healthier and longer, a new Harvard study finds. An analysis of 1.4 billion Internal Revenue Service records, focusing on the link between income and life expectancy, found that low-income residents in wealthy areas such as New York City and San Francisco live longer on average than those in poorer regions.

This comes down in part to a healthier lifestyle in more engaging communities; low-income residents in wealthier cities are less likely to drink as much, they exercise more and have lower rates of obesity than residents with similar incomes in less affluent cities. But by themselves, these factors aren’t enough to explain the life expectancy gap that the team found. And, as David Cutler, the Otto Eckstein Professor of Applied Economics and a professor at the Harvard Kennedy School and the Harvard T.H. Chan School of Public Health says, it’s unclear what other factors might contribute to the difference.

“It’s not an overwhelming correlation with medical care or insurance coverage,” he said. “It’s not that the labor market is getting better — it’s not correlated with unemployment, or the expansion or contraction of the labor force, or how socially connected people feel. The only thing it seems to be correlated with is how educated and affluent the area is, so low-income people live longer in New York or San Francisco, and they live shorter in the industrial Midwest.”

“Previously, we could say what life expectancy was like in Massachusetts as compared to Michigan, but the problem is that Massachusetts is much richer than Michigan, and we know mortality varies with income,” he continued. “What we wanted to do was compare the same people in both cities — a shopkeeper in Detroit with a shopkeeper in Boston, not a biotech executive. That’s what we can do with this data that people haven’t been able to do previously.”

The richest American men live 15 years longer than the poorest men, while the richest American women live 10 years longer than the poorest women, according to the Health Inequality Project. Image credits David Cutler.

Cutler and his co-authors, including former Harvard Economics Professor Raj Chetty now at Stanford University, mined federal tax records from 1999 through to 2014 for data and sorted people into 100 percentiles according to their income. They then looked at their death records and calculated the mortality rate and life expectancy at age 40 for each income bracket. For men, the gap between the richest and poorest brackets is a staggering 15 years. In women, the difference clocks in at around a 10-year gap between the richest and poorest bracket — the equivalent of the health effects of a lifetime of smoking.

“These differences are very, very troubling,” Cutler said. “The magnitude is startling. You might expect two or three years of life differential — which is roughly what we would get by curing cancer — but 10 or 15 years … it’s an immense difference. We don’t know exactly why or what to do about it, but now we have the tools to ask those questions.”

It’s not hard to figure out that a higher income translates to a longer life, but the researchers were surprised to discover that this trend never plateaus.

“There’s no income [above] which higher income is not associated with greater longevity, and there’s no income below which less income is not associated with lower survival,” he added. “It was already known that life expectancy increased with income, so we’re not the first to show that, but … everyone thought you had to hit a plateau at some point, or that it would plateau at the bottom, but that’s not the case.”

And just like income, life expectancy is unequally distributed around the U.S. When they superimposed their findings on the map, the researcher found that lower brackets tend to concentrate in the Midwest Rust Belt.

“What emerges strongly is that there is a belt from West Virginia, Kentucky, and down through parts of southern Ohio, through Oklahoma and into Texas — it’s not a story of the Deep South,” Cutler said. “The variability in [areas] where high-income people live longest is not as large and is much less geographically concentrated. You don’t see this same type of belt — it’s scattered all over.”

Life expectancy for (right) men and (left) women; bottom quartile. The darker colors on the maps indicate the lowest life expectancy. They range from fewer than 74.5 years for men and 80.1 years for women.
Image credits David Cutler.

Cutler and Chetty then calculated how life expectancy changed over time, and here the ever growing income gap also became apparent. While life expectancy has steadily increased for the wealthiest, it has only barely gone up for low-income Americans.

“The increase has been approximately three years at the high end, versus zero for the lowest incomes,” Cutler said. “This is important, because it has major implications for Social Security policy. People say, ‘Americans are living longer, so we ought to delay the age of retirement,’ but … it’s a little bit unfair to say to low-income people that they’re going to get Social Security and Medicare for fewer years because investment bankers are living longer.”

Cutler, Chetty and their co-authors have made the data publicly and freely available. They hope that this will encourage further research into how life expectancy is impacted by economic and social policies.

“This paper really has two missions,” said Cutler. “One is to present this data, but the other is to create this data set so it can then be used by policymakers and researchers everywhere. This data has never been looked at with this level of granularity before.”

Living with less is something many people are comfortable with, even something that gives them happiness. But living less is a whole different matter, and I think that this study speaks volumes about ever-widening wealth gap in the United States. Not only shorter lives but ones that people will enjoy less — previous studies have also shown how economic growth not accompanied by the distribution of wealth leads to overall unhappiness in lower-income classes.

A fair system of wealth distribution — or at least a fairer one — needs to be set in place so that these effects don’t spiral out of hand and end up leading us to a real-life “1984“. Until then, as income inequality and wealth stratification compound over time, their effects are only going to increase, for better or for worse, depending on how padded your wallet is.

The full study, titled “The Association Between Income and Life Expectancy in the United States, 2001-2014” has been published online in the Journal of the American Medical Association and can be read here.

Study finds global effect of temperature on productivity

A recent study published Wednesday in the journal Nature shows that there is a strong functional relationship between a region’s average recorded temperature and economic productivity — further warning of the damage climate warming would do to our economy.

Image via linkedin

The study compiled 50 years’ worth of economic data and temperature readings from over 100 countries and found a strong correlation between these two: regardless of a country’s wealth levels, human productivity seems to be highest for annual temperature values of around 13 degrees Celsius (55 Fahrenheit). In areas where the mean temperature value is higher than this, economic productivity declines “strongly,” the authors conclude.

“The relationship is globally generalizable, unchanged since 1960, and apparent for agricultural and non-agricultural activity in both rich and poor countries,” the study, led by Marshall Burke of Stanford’s Department of Earth System Science, notes. Solomon Hsiang and Edward Miguel, economists at the University of California, Berkeley, also participated in the study.

“These results provide the first evidence that economic activity in all regions is coupled to the global climate and establish a new empirical foundation for modelling economic loss in response to climate change,” they conclude.

Their findings means that unmitigated global warming could lead directly a more than 20 percent decline in incomes the world round, and increase economic inequality: Poorer, hotter countries will feel the effects worse than their colder, richer counterparts — “hot, poor countries will probably suffer the largest reduction in growth,” the authors note, also suggesting that countries such as Canada or Sweden will actually benefit from the change, as they move closer to the optimum mean value of 13 degrees.

“If you’re in a country where the average temperature is cooler than 13 degrees C, a little bit of warming could actually be beneficial,” says Burke. “On the other hand, if you’re already at 13 degrees C, a little extra warming is going to hurt you.”

Countries that fare considerably better are located in currently cold places — adding weight to the idea that northern countries will benefit from climate change. On top of easier shipping, resource exploitation, and tourism, there could be a productivity boost due to more favorable temperatures. Many tropical countries, in contrast, suffer economic damages in this scenario — getting hotter than they already are.

“Warming may amplify global inequality because hot, poor countries will probably suffer the largest reduction in growth,” the study concludes.

“The cross-country implications of the analysis is eye-opening,” said Rick Larrick, a professor at Duke’s Fuqua School of Business, after reviewing the study for the Washington Post. “Climate change is not just an environmental issue but geopolitical issue.”

He also claims that while short term temperature swings might cause economic hardships, the study fails to take into account economic adaptation to a long term temperature increase.

“Using year-to-year changes is a good proxy for long term temperature changes, but countries may not be prepared to invest in mitigation on such a short cycle (it is unanticipated and temporary); in the presence of ongoing climate change, however, countries might be forward looking in terms of investing in mitigation,” he said by email for Washington Post.

But on what factors exactly is this relationship based on? The authors consider agriculture and human behaviour to be the main causes:

“We see that agricultural productivity declines, labor productivity declines, kids do worse on tests, and we see more violence.”

The paper draws on a historical analysis of 166 countries over 50 years, looking at GDP per capita and corellating them to the temperature fluctuations that these countries experienced. They only compared each country “to itself in years when it is exposed to warmer- versus cooler-than-average temperatures due to naturally occurring stochastic atmospheric changes,” to eliminate factors such as national wealth or culture.

“An economy observed during a cool year is the ‘control’ for that same society observed during a warmer ‘treatment’ year,” the authors write.

After identifying the temperature-productivity relationship, the authors created estimates for the effect it will have in the future, if steps are not taken to stem global warming:

“In 2100, we estimate that unmitigated climate change will make 77% of countries poorer in per capita terms than they would be without climate change.”

Previous work done by the three researchers showed that increasing temperatures lead to increased violence, and Hsiang found a relationship between warmer climate and poorer math test scores.

“We find that math performance declines linearly above 21C (70F), with the effect statistically significant beyond 26C (79F),” that previous paper reported.

Other research confirms that global warming will reduce wheat yields, among other detrimental effects on agricultural production.

But, even considering this large body of research is consistent with the new study, the paper is not without its critics. University of Sussex economist Richard Tol considers it “hugely problematic” in an email to the Washington Post.

“They extrapolate from modest warming between 1960 and 2015 to massive warming between 2015 and 2100,” he objected, among a number of other technical criticisms.

In an accompanying commentary on the paper, also in Nature, economist Thomas Sterner of the University of Gothenburg, Sweden was less critical but noted that the work will have to withstand academic scrutiny.

“The conclusion that temperature-associated costs will be higher than previously calculated will cause a stir, and should have stark repercussions for policy,” wrote Sterner. “The authors take great care to check the robustness of their findings but there will, no doubt, be attempts to look for other data and approaches, which may give different results.”

Another question that arises from the study is to what extent technology can overcome the adverse effects of warmer temperatures:

“Air conditioning absolutely can help, but the data suggests that it does not fully insulate you from the effects of temperature,” says Burke. “We do not find that technological advances or the accumulation of wealth and experience since 1960 has altered the relationship between productivity and temperature.”

It remains to be seen if the scientific comunity’s review of the paper is favorable or not.

Rich but not happier — why economic growth doesn’t always translate to happiness

It’s easy to assume that with economic gain comes happiness — we live in capitalism, after all. But science comes to prove us all wrong yet again, and shows that the link between economics and happiness is much more complicated that we thought. Research shows that getting a promotion or a salary raise can increase a person’s satisfaction and give an emotional boost, but only for a short while. Not even something as huge as winning the lottery doesn’t make a permanent change to people’s overall life satisfaction. Money can’t buy happiness, it seems.

And just as a person’s happiness is a result of more than just money, a country’s economic growth doesn’t directly translate into happier citizens — this is known as the Easterlin paradox, after economist Richard Easterlin, the one who observed and documented the phenomena in 1974.

So money can’t buy happiness for countries either, ok, cool. Only that for some…It totally does.

Image via davidruyet.wordpress

What gives!?

Critics have pointed out that in several countries — Italy, Denmark, Luxembourg for example — citizens’ happiness has increased in tandem with the local economy. But for the United States it hasn’t — the Easterlin paradox still applies here: major economic gains over the past 40 years have not led to an overall increase in national happiness. So why does that happen?

Well, psychological scientists Shigehiro Oishi from the University of Virginia and Selin Kesebir from London’s Business School think they may have found the reason why some countries show the paradox and others don’t: income inequality.

“Economic growth is typically not shared equally across segments of society and often results in increased income inequality,” the researchers explain. So, although a country’s GDP may be rapidly expanding, only relatively few people are actually benefiting from this economic prosperity.

The two tested their hypothesis, and their findings were published in the journal Psychological Science.

“Our analyses demonstrate that once one considers income inequality, the Easterlin paradox is not so paradoxical anymore,” the researchers write.

Drawing on data pertaining to economic growth, income inequality and reported happiness levels from 34 countries, Oishi and Kesebir found “support for the idea that the Easterlin paradox can be explained by the toxic effects of income inequality.” They started by mining data from the World Database of Happiness, looking at 16 developed countries in Europe and Asia that had at least 10 years of data available between 1959-2006. They correlated this with the countries’ GDP, taken from the World Development Indicators online database, and calculated income inequality for each, using the Gini index.

“For a nation’s life satisfaction to increase, producing more wealth is not sufficient. The fair distribution of the added wealth may critically determine whether life satisfaction will rise on the whole,” they write.

They found that changes in income equality was a better explanation for happiness better than GDP per capita alone. In years with high income equality, economic growth entailed an increase in general life satisfaction. In years with economic prosperity but large gaps in income equality there was no increase in a population’s happiness.

“What was surprising was that happiness levels did not change from 1947 when GDP per capita was $13,407 (in current dollars) to 1970 when GDP per capita rose to $22,996,” the authors explain. “On the basis of our findings, it is safe to say that if income and happiness go together, it is when income is distributed evenly.”

A second set of data was collected from the Latinobarómetro, a representative public opinion survey conducted annually in 18 Latin American countries and Spain. In both sets of analyses, the researchers found a significant interaction between GDP per capita and the Gini coefficient; citizens’ life satisfaction, on average, was lower in years of greater income inequality.

“Considering the recent trend of growing income inequality in many parts of the world, our findings suggest that more instances of the Easterlin paradox will be observed, with economic growth not necessarily increasing the happiness of a country’s citizens,” Oishi and Kesebir conclude.