If you are so rich, why are you unhappy?

"Okay, if you can't give me a raise, how about you take a pay cut for Jack?" A rich man is someone who makes a hundred dollars more a year than his brother-in-law. ─ American linguist and well-known journalist H. L. Mencken

Suppose you are asked to live in one of two imaginary worlds, where prices are the same:

In the first world, you make $50,000 a year while everyone else makes $25,000 (on average).

In the second world, you make $100,000 a year while everyone else makes $250,000 (on average).

What would your choice be? This question once tested a group of Harvard students, and most of them chose the first world. They would rather be poorer as long as their relative status is higher. Many other students concluded the same thing. People care a lot about their relative incomes, and they are willing to accept significant reductions in their living standards as long as they have a higher status compared to others.

People also compare their income to what they are used to, and when they are asked how much money they need, they always say they need more than someone who is slightly poorer.

So whether you're satisfied with your income depends on how it compares to certain standards. This standard has to do with two things: how much other people make, and how much you are used to making. In the first case, your feeling is that of social comparison. American social psychologist Festinger proposed that when the situation is unclear, when individuals need to evaluate their own abilities, they will first compare the abilities of others with their own. Therefore, when you make a judgment without a clue, you will refer to the opinions of people who think you are better than us. In the second case, you are led by habituation (Editor's note: habituation. The most basic type of learning, that is, learning to ignore insignificant or insignificant stimuli. When the same stimulus is given repeatedly, the animal will gradually become accustomed to this stimulus, and gradually reduce the response to the stimulus, or even ignore it completely).

Because these two forces are so strong in human nature, the possibility of increasing human happiness through economic growth is even smaller. Because when income increases, the evaluation standards for income will also increase. This can be known from the data collected by the Gallup Poll in the United States over the years. The question the respondents were asked was: "In this society, how much money does a family of four need to live on at least?" Chart 4-1 shows their "necessary real income" (adjusted for changes in living expenses). It also shows the average "actual real income per person." We will see that people's standards will quickly adjust to their actual living standards. No wonder people aren't getting happier.

Another investigation provided further evidence. Since 1972, the United States has conducted surveys on satisfaction with the national economic situation. The results show that although each person's real income (modified according to soaring prices) has nearly doubled, the proportion of people who are very satisfied with their economic situation has actually declined.

These facts are so depressing. In order to interpret these statistical results, we must study more deeply the two mechanisms of "social comparison" and "habitual adaptation."

(Reprint) Happiness: Lessons from a new science

Author: Richard. layard

/ If you are so rich, why are you unhappy? / Social Comparison / The Hedonic Treadmill / What went wrong?

Date of writing: July 08, 2016