Absolute Income, Relative Income, and Happiness
RICHARD J. BALL Haverford College - Department ofEconomics; KATERYNA CHERNOVA Exelon Corporation
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Abstract:
This paper uses data from the World Values Survey to investigate how an individual's self-reported happiness is related to (i) the level of her income in absolute terms, and (ii) the level of her income relative to other people in her country. The main findings are that (i) both absolute and relative income are positively and significantly correlated with happiness, (ii) quantitatively, changes in relative income have much larger effects on happiness than do changes in absolute income, and (iii) the effects on happiness of both absolute and relative income are small when compared to the effects several non-pecuniary factors.
Ball, Richard J. and Chernova, Kateryna, "Absolute Income, Relative Income, and Happiness" (May 2005). http://ssrn.com/abstract=724501
"...we include two dummy variables reflecting a three-way categorization of the countries in our sample. The first category consists of the countries for which, in regression 1, the coefficients on the dummy variables were positive and significant at the
99 percent confidence level, namely Colombia, Finland, Sweden and Switzerland."
"Both Latin American countries have positive
coefficients, one marginally significant (Venezuela, with a p-value of 0.174) and one highly significant (Colombia, with a p-value less than 0.001)"
THE SCIENTIFIC PROOF IS INCONTROVERTABLE. HIGHLY SIGNIFICANT POSITIVE COEFFICIENTS. COLOMBIA WINS.
By platano on Aug 16, 2005, 13:43 in Friendly Talkzone.
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Blue says on Aug 16, 2005, 14:44: Wait a minute.. There's nothing scientific about "social science". These bogus "sciences" are based on correlations and not cause and effect. Showing correlations can be interesting but oftentimes irrelevant in any rigorous classification of observations. It may be that Colombia is the happiest country but I don't believe this research shows this. What this research does show is that people in certain groups and with certain characteristics often consider themselves happy and are perceived by others to be happy. But generalizing to a country as a whole is a gigantic leap. Besides, happiness is a subjective phenomenon to begin with. It doesn't exist independent of a cultural context and would never be subject to objective analysis.
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Islander says on Aug 16, 2005, 14:53: Whatever blue says, I'm really Happy true or not, i'm Completely Happy! I Love my country 0 funny, 0 helpful. |
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Crazy Eagle says on Aug 16, 2005, 15:53: social science is still science The nature of science is poorly understood, even by many working scientists. The best exposition of philosophy of science is by Karl Popper, and his work has been endorsed over and over again by many brilliant scientists, Einstein and Nobel prize winner John Eccles being just a few. "The natural rhythm of life is routine punctuated by orgy" Aldous Huxley 0 funny, 0 helpful. |
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platano says on Aug 16, 2005, 16:29: Actually, my anecdotal experience is a bit at odds with... the idea that there is a correlation between happiness and money. In twelve years travelling all over Colombia, living in Medellin and Cali and visiting with people (urban and rural) of all different socioeconomic strata I would have said that (compared to the other 17 countries I have visited).... Colombians are the happiest in ALL economic levels. In "tugurios" or poor rural "chozas" or wherever ... with a bag of chips and 2-liter bottles of soda we would dance all night (cumbia, vallenato, guasca, salsa, chuco chuco, paso doble, waltz, tango, it didn't matter. We danced to freaking Bach and Mozart!) In Cali we would pile into somebody's broken down Renault 4, cross the bridge at 3:00 a.m., and continue to dance in Juanchito until 6:00 a.m. (only salsa and timba of course)
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Crazy Eagle says on Aug 16, 2005, 16:47: what about gringos in Colombia? So, any evidence, anecdotal or otherwise, that gringos in Colombia are happier than gringos in thier natural habitat? "The natural rhythm of life is routine punctuated by orgy" Aldous Huxley 0 funny, 0 helpful. |
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platano says on Aug 16, 2005, 16:57: No, here's one anecdote that says non-Colombians are not.... always happier. A German woman came to visit me in Medellin after giving a lecture in Bogota at some university. She complained that her human rights were being violated in Colombia. When I asked how she explained that she would wait at bus stops and not know when the bus would arrive and there were no posted timetables, which in her eyes was a violation of her human rights!
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platano says on Aug 16, 2005, 17:24: You know, I gotta wonder here if some people have trouble... accepting a list like this: Colombia, Finland, Sweden and Switzerland, in which Colombia comes out superior to the most developed of Scandanvian and European countries. And so the science is questioned. I have devoted a lot of time to presenting the evidence, defending the soundness of the methodological approaches to the data PROVING THAT COLOMBIA IS THE BEST COUNTRY IN THE WORLD and the science just keeps piling up to substantiate my claims. If that goes against your conception that Finland, Sweden and Switzerland should be ahead of Colombia... well, be a little more open-minded about it. Colombia is the best! Period.
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platano says on Aug 16, 2005, 17:59: I dedicate my above posts to... the absent and missed ColX.
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YANI-34 says on Aug 16, 2005, 18:14: i dont believe it........ I dont believe that this info is true. Half of the country is living in poverty and most of the other half is barely getting by. Maybe the people are happy but how happy can we be if we cant even afford to live our lives without worrying about money all the time.
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platano says on Aug 16, 2005, 18:25: Of course you are free to disbelieve scientific evidence... but unless you can point to another equally valid scientific study that comes up with a different conclusion your beliefs are irrelevant.
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Blue says on Aug 16, 2005, 18:44: OK Crazy Eagle You accept the legitimacy of social science. Which country in the world is the happiest?
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Dan says on Aug 16, 2005, 19:16: I know I would be happier if I was in Colombia. Then I can be with my family and just relax by a pool in Melgar or kicking back in a little tavern in La Candelaria. God Bless America! 0 funny, 0 helpful. |
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poco says on Aug 16, 2005, 20:56: True but I've never been around happier people in my Rural Farming town. Then again I have not visted the other mentioned countries. I'd venture to guess the bottom 60% in Colombia are happier on the average than the top 10% in the United States. Being happy does not mean you need "stuff". "When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks 0 funny, 0 helpful. |
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Dolfi says on Aug 17, 2005, 00:48: Platano, whats´the celebrated Transmilenio in Bogotá? It´s a bus running accord to schedule, just like all buses do in Germany, and people are proud of it. And of course it´s much faster than those buses that stop every minute to let someone get on or off.
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juanalejo says on Aug 17, 2005, 06:18: Dolfi Transmilenio is not a bus that runs on time. It is a mass transport system.
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sonagul says on Aug 17, 2005, 10:06: since when Economics has anthing to do with Science Just like it bugs me when they call politics a Political Science, I get annoyed when Economics becomes a matter of a scientific approach. Your Rsq can be stretched in any direction and that alone does not make it a science any longer. Most important, can Economists spend their grant money on a more material subjects on poverty than measuring happyness index? Or just giving the money where it has high value.
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Andy-NY says on Aug 17, 2005, 11:13: From a recent article............ The latest buzz in the field of economics points to a myriad of studies examining the link between happiness and wealth. These studies all seek to answer the question: Are richer people happier? Prevailing research suggests no. Obviously if you’re living in poverty, more money probably will increase your level of happiness. Andrew-NY 0 funny, 0 helpful. |
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sonagul says on Aug 17, 2005, 11:33: wealthy vs happy how do we appear to be wealthy in the west...
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platano says on Aug 17, 2005, 11:53: What makes it a science (either physical or social) is... 1) An instrumental injunction
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paisa29 says on Aug 17, 2005, 12:59: I think the Money can`t provide happiness, definitively it helps to increase the level. I know some wealthy people who are complained all the time because the are alone and also know some people who has only the primary things for living and are happy "Fill the earth with the light and warmth of hospitality" Conrad Hilton 0 funny, 0 helpful. |
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Colombiche says on Aug 17, 2005, 13:07: Money doesn't buy happiness..... But then again, neither does the lack of it. No me den trago extranjero, que es caro y no sabe a bueno.... (Rafael Godoy) 0 funny, 0 helpful. |
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poco says on Aug 17, 2005, 13:08: Money is NOT everything There is no doubt a correlation between the countries with lower levels and the FACT they SHOULD NOT be happy. Colombia and Nigeria do rank high if you DO NOT ADJUST the numbers, the countries with the highest wealth come out on top. Nigeria was 19th on the “subjective��? list I saw a few months ago. Can’t remember Colombias ranking but I remember thinking if “adjusted��? for GDP per capita they would rank number one. I’ve NEVER seen Venezuela on ANY listing and the big difference is a border painted on a map. Numbers I’ve found. CIA fact book Poverty Threshold 47 Ven. And 55 Col. About 2 to 3 years old. Latest Figures (2005) from DIFFERENT sources. The figures, on Page 5 of the Venezuelan Institute’s Social Report, show that poverty in Venezuela rose from 43 percent to 54 percent of the population during Chávez’s first four years in office. And extreme poverty — the percentage of the population that lives on less than $1 a day — grew from 17 percent to 25 percent during the same period, the figures show. PS: Saw a HIGH number of over 70%. The situation in Colombia appears the opposite. The poverty threshold levels are reported to have DECREASED from 55% to 45%. I’ve seen this trend noted on several sites. I have personally seen a marked improvement in the Rural Area over the last three years. Colombia seems to have a plan. Colombia – Next 15 Years Let’s hope it does not make them unhappy. "When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks 0 funny, 0 helpful. |
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Desideria (Moderator) says on Aug 17, 2005, 13:10: from the same web page: Path To Happiness "When shall we three meet again? In thunder, lightning, or in rain?"(First Witch in Macbeth) 0 funny, 0 helpful. |
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poco says on Aug 17, 2005, 13:20: Ahhhh Ha,, correcto Stop comparing your looks with others "When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks 0 funny, 0 helpful. |
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Blue says on Aug 17, 2005, 13:26: Platano Has social science research ever taught you anything you didn't already know?
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sonagul says on Aug 17, 2005, 13:33: social science most of the social science assinine is a result of "publish or perish" phenomena as opposed to the common thought that it is driven by new ideas. in fact, there is rarely anything new after pages and pages of calculations, we end up with a common sense knowledge.
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Blue says on Aug 17, 2005, 13:39: Many in the U.S.A. hop on the consumerism train and never get off living their lives constantly wanting more, better and newer things. We're taught from our first day in school to be obedient and conform so we can eventually get a job and get on this train. Lives spent this way give us material comfort but maybe not other things which contribute to overall happiness. Work preoccupies most americans and defines our self-image. I can see why many other countries may have more overall satisfied people.
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poco says on Aug 17, 2005, 14:10: There is a phrase A great many Americans, probably more than half are best described as: "When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks 0 funny, 0 helpful. |
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platano says on Aug 17, 2005, 18:25: Blue, you ask... Has social science research ever taught you anything you didn't already know?
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Colombiche says on Aug 17, 2005, 20:04: Yeah Baby! I don't know whether Colombians have become happier per se because of Uribe, but we have definitely become more hopeful. Hope I think is one of the main elements of happiness. When people are hopeless, optimism wanes. No me den trago extranjero, que es caro y no sabe a bueno.... (Rafael Godoy) 0 funny, 0 helpful. |
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Colombiche says on Aug 17, 2005, 20:17: Oh no... oh no... trip down memory lane (run!) I remember growing up in Manizales I never felt cold. People talked about the city being cold, but I never felt cold. The sky was usually blue and we could always see El Volcan Del Ruiz in the distance. The same volcano that almost wiped us off the map that fateful day in 1985. No me den trago extranjero, que es caro y no sabe a bueno.... (Rafael Godoy) 0 funny, 0 helpful. |
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Elbigie says on Aug 18, 2005, 19:15: Not that Happy How do you explain that thousands of people leave the "happiest" country?. That doesn't make sense to me. I have the feeling we're not the happiest people after all.
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platano says on Aug 18, 2005, 19:33: There is a whole field of happiness studies and I am not... even going to try to summarize it here.
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Elbigie says on Aug 18, 2005, 23:49: I know most people always look for greener pastures, and yes that could be a good thing, I agree with you. But the actual question still remains: if the country is so happy why the Diaspora?. It's ok. to leave a country to see other cultures, study abroad, etc. But, it gets a bit tricky when you have to leave your country, not by choice ,but because you are threatened by the right or the left -or by those in the middle too- or because you're in your early 30s and no one is going to give you a job. Those that have the chance to migrate legally are the unhappy lucky ones. Those that stay behind in the same circumstances are the unhappy unlucky people.
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Dolfi says on Aug 19, 2005, 01:54: There are two aspects to it. One is being happy in every day life, enjoying simple things like having a drink with friends, a walk in the sunshine etc. And as far as this kind of happiness is concerned, you latinos beat everyone else, according to my experience. But to be able to live a really happy life you need more: a certain level of security, an outlook for the future, economic stability etc. And as far as this is concerned, most europeans are probably happier than colombians. This on the other hand means that many people in Europe have lost the feeling for happiness in everyday life and are obsessed with high level consuming and so on.
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poco says on Aug 19, 2005, 01:55: Whaddya Know I knew the whole patriotic effort I suffered through in the USA was just propaganda. You’re not alone. Just a little more pacifistic. No, I'm not an American. I'm one of the 22 million black people who are the victims of Americanism. One of the 22 million black people who are the victims of democracy, nothing but disguised hypocrisy. So, I'm not standing here speaking to you as an American, or a patriot, or a flag-saluter, or a flag- waver-no, not I. I'm speaking as a victim of this American system. And I see America through the eyes of the victim. I don't see any American dream; I see an American nightmare.... Malcolm “X��? - 1964 "When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks 0 funny, 0 helpful. |
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platano says on Oct 8, 2005, 20:39: Blue asks, "Platano, has social science research ever taught you anything you didn't already know?"
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utopiacowboy says on Oct 9, 2005, 12:37: The religous fanaticism in the US explains why we have more in common with the Middle Eastern countries than we do with Europe and Canada. Personally I like the fanaticism. All that liberal moderation makes me puke. Disclaimer: any comment I make is inane and is not to be taken seriously, and is so patently ridiculous that no one should take it seriously, even as an insult. 0 funny, 0 helpful. |
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poco says on Oct 9, 2005, 13:02: Cosmic Joke "When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks 0 funny, 0 helpful. |
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