New research reported by behavioural economist Daniel Kahneman, shows a fascinating distinction: “money doesn’t buy you experiential happiness, but lack of money certainly buys you [the experience of] misery.” Check out Kahneman’s TED Talk here.
Kahneman explains that the research from the USA shows people’s moment to moment feelings of happiness increase as their income increases, until it hits a level of $60,000, then it ‘flat lines’. This means that above that level of income more money doesn’t buy a happier life for the ‘experiencing self’.
But, according to Kahneman, we don’t tend to pay a lot of attention to our ‘experiencing self’ and this is what has confused both economic and psychological research. We have another self he calls the ‘remembering self’ or the ‘reflecting self’. This self keeps score, but isn’t good at counting all the individual moments of happiness, so it uses short cuts by counting the changes and significant moments. Thus, our remembering self tends to be more satisfied with life to the extent that we keep earning more income and we keep achieving goals.
What is the key to happiness for the experiencing self? Kahneman says that it is primarily comes from “spending time with people that we like”.
For Kahneman the differing measures for the two selves reflect some of the dilemmas for USA and to a great extent Australia:
– some of us don’t have enough income to live on so we experience unhappiness and dissatisfaction
– some of us are experiencing a happy life – living and working with people we love – but on reflection think that we are not “achieving goals and earning more”, so we are dissatisfied with our lives
– some of us are earning and achieving and think we are happy, until our loved ones or employees leave us
– some of us have got the formula right – we aim to earn a modest but always slightly increasing income and we set goals for more and better interactions with those with whom we love, work and serve.
What a fabulous way to live!