The Happiness of the Richest
By Bryan Caplan
Over lunch, Justin Wolfers mentioned a hard-to-believe fact: In a data set with an unusually high maximum income category, 100% of the richest people were “very happy.” I decided to track down the data. Despite my incredulity, Justin’s description was literally correct. From a 2007 U.S. Gallup poll:
Yep, 100% of the respondents with family income over half a million a year were indeed very happy. Of course, there were only 8 such respondents. And in the same survey, happiness was virtually flat from $30k to $150k – roughly the 20th through 90th percentiles. Extreme Epiricureanism is both demonstrably false and approximately true.
P.S. David’s thoughts about the ideological compatibility of happiness research and free-market economics make me realize I should have been clearer. Two points:
1. David is correct to observe that diminishing marginal utility of income/wealth is entirely compatible with a suitably internationalist free-market economics. If a dollar means more to a poor man than a rich man, using government to help relatively poor First Worlders at the expense of absolutely poor Third Worlders is morally perverse.
2. Still, the small effect of income/wealth on happiness throughout the income distribution remains ideologically inconvenient for free-market economists. A free-market economy is a fantastic tool for making people rich, but making people rich is a mediocre tool for making people happy.