New research from the UK suggests changes in income do not affect most people’s happiness — most of the time.
The research examined levels of life satisfaction and income changes in more than 18,000 adults over a nine year period. Investigators discovered income variation is only important when individuals with specific personality characteristics experience an income loss.
Investigators from the universities of Stirling and Nottingham found that for most people happiness is more tied to avoiding a loss, rather than aiming for continual financial gain.
Researchers studied two separate samples from Germany and the UK, with each group asked annually about their income level and how satisfied they were with life. The questions were delivered for a nine-year period. Participants also answered questions on their personality at the start of the study.
Investigators discovered that regardless of personality, income increases did not affect life satisfaction.
When people lost income, however, there was a reduction in their life satisfaction. This was far greater for those who reported themselves as being conscientious, namely they were thorough in their attitudes to life and work, energetic, and effective and efficient in how they did things.
Dr Christopher Boyce of the Behavioral Science Center at the University of Stirling, leader comments, “It is often assumed that as our income rises so does our life satisfaction, however, we have discovered this is not the case. What really matters is when income is lost and this is only important for people who are highly conscientious.”
Unfortunately, being conscientious appears to have a negative effect when income is reduced.
The study — which accounted for shifting circumstances such as entering or leaving work, and changes to health and household make up — found that for people that were only even moderately conscientious, a loss of income had a negative impact. And, this impact was at least two and a half times greater than less conscientious individuals.
The findings may be used to impart financial advice for workers and investors.
“Continually increasing our income is not an important factor for achieving greater happiness and well-being for most people living in economically developed countries. Instead, we should aim for financial stability to achieve greater happiness, while protecting those individuals who experience negative income shocks,” explains Boyce.
Source: University of Stirling