There are many homilies on whether or not money can buy happiness. But none posed the inverse question, until now. A reasonably solid longitudinal study (performed over a period of time by following the experimental subjects) suggests happiness might lead to better income potential. It finds people who described themselves as happier while growing up went on to earn more than those who weren’t happier. Here is the PDF link.
Naturally you are asking
- What is happiness?
- How is it measured?
- When was it measured? – After all there are many studies from reputable consulting firms and academia that measure an attribute now and say all the past growth was due to that attribute.
- What about the effect of parents, more precisely genes on the earning potential?
- What are the other lurking variables here?
All very good questions and these are posed and answered by the researchers except for the last one.
They defined and measured happiness based on answers to four statements
The positive affect subscale is additively composed of the responses to the following four particular statements:
“You enjoyed life,”
“You were happy,”
“You felt hopeful about the future,” and
“You felt that you were just as good as other people.”
They did a truly longitudinal study, starting at age 16 and studying income at age 29 for a large sample size. So it avoids hindsight bias and selective recall by participants. It also avoids survivorship bias in the results.
Regarding the effect of parents, family and genes, they controlled for that by studying siblings.
Among siblings, a one-point increase in life satisfaction at age 22, compared with the mean of the family, translated into a nearly $4,000 difference in earnings at age 29, compared with the family mean.
Now that the four main questions are answered can we say categorically that it is not just mere correlation between happiness and income and happiness is the causation?
Unfortunately not. What if there is another lurking variable that led to the respondents’ happiness that is also responsible for their income potential?
But compared to most studies we see this one merits closer look.