Higher Incomes, Less Happiness

A recently released study by the CDC reveals that people who live in sunny, warm states—Hawaii, Florida, Louisiana, Tennessee, and Arizona are the top 5—report the highest levels of satisfaction in their lives. But what I find most interesting is what’s going on at the bottom of the list: The states with the least happy people tend to be the ones with the highest median incomes.

Check out the happiness rankings. Here’s a snippet from the bottom of the list, which includes the District of Columbia (hence there are 51 entries rather than 50), and which ranks New York dead last:

39. Nevada
40. Maryland
41. Pennsylvania
42. Rhode Island
43. Ohio
44. Massachusetts
45. Illinois
46. California
47. New Jersey
48. Indiana
49. Michigan
50. Connecticut
51. New York

Most people think of a lot of these states as very well-to-do, and they are. According to the Census, the median income throughout the U.S. was $52,175 in 2008. Nine of the bottom 13 states have a higher median income than the U.S. as a whole; of those 13, only the hard-hit industrial states Indiana, Michigan, Ohio, and Pennsylvania are below the national median. Perhaps most interestingly, the three richest states—Connecticut, Maryland, and New Jersey, all with median incomes above $68K—are all on the “less happy” end of the scale.

There are holes in any theory on happiness: California (#46), for instance, is an obvious sunny-and-warm state where people aren’t all that happy, apparently. If sunshine was a prime factor in happiness, you’d think that Washington, Maine, and Alaska would be way down on the list, but they’re not (#36, #10, and #12, respectively). And just because people make decent money, it doesn’t mean they’re unhappy: Hawaii (#2) boasts one of the highest median incomes ($66K). It’s all relative to the cost of living, of course, and other factors—like traffic.

An AP story that sums up the rankings quotes one of the academics that poured over the data. Was he surprised that New York and California, where it seems like everyone says they want to live, were among the least happy states?

“I am only a little surprised,” he said. “Many people think these states would be marvelous places to live in. The problem is that if too many individuals think that way, they move into those states, and the resulting congestion and house prices make it a non-fulfilling prophecy… We wanted to study whether people’s feelings of satisfaction with their own lives are reliable, that is, whether they match up to reality — of sunshine hours, congestion, air quality, etceteras — in their own state. And they do match.”

In other words, too many people can ruin a good thing.

Also, much in the way that you shouldn’t assume that homeowners are happier than renters (they’re not), you shouldn’t assume that people living in high-income areas are happier (they’re obviously not). Part of the problem is that some people move to these areas in order to feel rich and successful—like they’ve “made it”—and yet everywhere they look, there’s someone who is richer and more successful than they are.

As a wise man once said, “Mo Money Mo Problems.”

Related:
Recession or No Recession, Come On, Get Happy”

On Second Thought, Perhaps Money Can Make You Happy

Related Topics: CDC, happiness, homeowners, income, median income, rent, Careers & Workplace, Real Estate & Homes
  • bacotawordpress

    This list really tees me off.

    - Bruce from New York

  • http://keithwishum.wordpress.com keithwishum

    Perhaps happiness has nothing to do with climate or income and is, instead, an attitude that anyone can choose anytime anywhere. An ancient Christian writer claimed to have “learned the secret of being content in any and every situation.” It’s a secret anyone can learn. (for more info, see http://amzn.com/144218776X)

  • nick1254367

    Hi,
    Interesting thoughts! I believe it’s not possible to make a general statement on whether money makes people more or less happy.

    Money comes with a whole set of new elements that may have good or bad impact on our happiness, and depending on how susceptible we are to every one of them, the conclusion will go one way or the other (i.e. different from person to person). I recently made an effort to provide a more comprehensive picture of what these ad- and disadvantages are. I invite you to have a
    look at Money and Happiness and tell me what you think!

    Thank you, Nick

  • http://nathanfrazier.wordpress.com nathanfrazier

    One of the salient features of NYC culture is its abrasiveness and standoffishness. There is also an air of competitiveness and “downwards social comparison”/ “keeping up with the Joneses” in NYC. Interestingly, it also scores high on levels of human development.

    One of the salient features of Louisiana culture, on the other hand, is its warmth and friendliness. It also seems to be a less competitive place; if anything, there even seems to be some self-deprecating humor there. Interestingly, it also scores low on levels of human development.

    Perhaps when a place becomes popular (and the supply side of its economy has a lot to offer), people and businesses do end up competing for limited space and other increasingly scarce resources. The more driven and productive people are there, the more likely they are to win the competition for those scarce resources. (This may also account for the higher levels of human development and higher costs of living there as well.)

    To the extent that the competition becomes Machiavellian, there may also be a resulting sense of social disconnection. (This is certainly consistent with a culture of “downwards social comparison,” abrasiveness, etc.)

    The social disconnection in NYC may in turn lower the subjective sense of well being there. One might think that a higher income enjoyed there might offset the costs of social disconnection, except that research has revealed that the subjective sense of well being does not increase with income after the first 10 to 15k per year (which, interestingly, is about the amount needed to meet ones basic needs for food, shelter, etc). Similarly, lottery winners report an increase in the subjective sense of well being that only lasts for about three years or so – then they return to their pre-winnings baseline level of happiness. Thus, despite the income gap, the greater level of social connectedness in Louisiana may explain why Louisiana scores higher on the subjective sense of well being than NY.

    Something similar seems to be going on in Sweden which also gets a high score in the (international) subjective sense of well being rankings. It’s highly compressed tax brackets have slowed economic growth on the one hand, but have decreased competitiveness and downwards social comparison on the other. They also report high levels of social cohesion in Sweden.

    But one might also argue that social cohesion by itself is not sufficient for human happiness. World religions, ideological zealotry, national extremism, addictions to social support, cloying relationships, etc may be associated with safety and boredom initially but may ironically lead to wars, argumentativeness, and a need for more excitement ultimately. Certainly Baton Rouge and Stockholm would not be considered as exciting places to live as NYC and Los Angeles.

    One thing that probably everyone can agree on is that people do need some excitement and growth in human development on the one hand, but that it would ideally be done within a social context of fair and friendly competition and systemic cooperation on the other. This would probably lead to relatively high levels of excitement on the one hand and a fairly high subjective sense of well being on the other – both of which are probably necessary for stable and long term happiness.

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