Proof Money Can't Buy Happiness? Higher Income Doesn't Increase Life Satisfaction, But Losing It Is Something Else
Increasing your life satisfaction could be as simple as putting on a pair of perfectly-fitting jeans, catching the bus just before it leaves, or finding the tastiest burger within walking distance of your apartment. But is getting a pay raise on the list of happiness boosters? Not according to a study conducted by Scotland’s University of Stirling. In fact, income change is more important to highly conscientious people, and only when it’s negative.
The research, published in Personality and Social Psychology Bulletin, looked at the levels of life satisfaction in 18,527 adults from two separate samples in Germany and the United Kingdom. They found that most people were happy when they avoided losing money, not when they got more.
"It is often assumed that as our income rises so does our life satisfaction, however, we have discovered this is not the case,” lead author Dr. Christopher Boyce of the University of Stirling said in a press release. “What really matters is when income is lost and this is only important for people who are highly conscientious."
The researchers measured life satisfaction over the course of the experiment by simply asking, “how satisfied are you with your life, all things considered?” Participants choose their replies on a scale of zero, or completely dissatisfied, to 10 — complete satisfaction. Before the experiment began, the participants filled out a 15-item personality test. The researchers measured conscientiousness by asking each participant whether he saw himself as someone who “does a thorough job” and “does things effectively and efficiently” or if he tended to be lazy.
The study also accounted for extenuating circumstances like job changes, health problems, and the family makeup to calculate their results.
The findings showed that when people got a raise at work, their overall life satisfaction didn’t actually increase, regardless of their personality. However, when people reported a loss of income, or a reduction in it, they also reported being less satisfied with their lives. The researchers found that people who were less satisfied considered themselves highly conscientious. Surprisingly, even those who were only mildly conscientious were two times more likely to be negatively impacted by an income loss than those who reported themselves to be less conscientious individuals.
"Continually increasing our income is not an important factor for achieving greater happiness and well-being for most people living in economically developed countries,” Boyce said. “Instead, we should aim for financial stability to achieve greater happiness while protecting those individuals who experience negative income shocks."
In the future, the researchers hope to narrow their focus by determining whether people are financially satisfied or if family dynamics have any role in life satisfaction. The authors conclude their study by wondering if the conscientious personalities in a family influence how it reacts to the news of an income loss.
Source: Boyce C, Wood A, Ferguson E. Individual Differences in Loss Aversion: Conscientiousness Predicts How Life Satisfaction Responds to Losses Versus Gains in Income. Personality and Social Psychology Bulletin. 2016.