In this almost communist version of capitalism, the impact on the firm is likely to be massive. Price’s decision was not only a great and happy surprise for the half of his staff who earned less than $70,000, but also is a very interesting social experiment. The graph comes from the publication (Kahneman and Deaton 2010) But what the three characteristics have in common is that all of them at a certain point – at around $75,000 – increase only very marginally or even degree. The factor ‘not blue’ shows the largest difference, indicating that sadness and worry are more strongly associated with lower incomes. The table summarises the findings: all three factors increase when income increases. Finally, Kahneman and Deaton extracted income data from the survey. Thirdly, ‘stress-free’ measures one question: whether the interview person experienced stress the day before. Secondly, ‘not blue’ uses a similar technique, but regards the number of people who did not experience sadness and worry. Firstly, ‘positive affect’ measures how often people report happiness, enjoyment, and smiling and laughter people were asked whether they experienced these (and other) emotions the day before their interview. They distill four indicators out of the Gallup data. How do Kahneman and Deaton come to the figure of $75,000? Whilst the article is very readworthy, let me give you a quick overview. For instance, a UK study based on figures for multiple countries from the World Value Survey I cited in another post reported a figure already of $30,000 as a cut-off point. Indeed, an enormous number of studies has been dedicated to the topic, and findings are inconclusive. As they acknowledge their study does not settle the eternal question whether money buys happiness. Analysing data on salaries and well-being within a Gallup poll under 450,000 US citizens, Kahneman and Deaton found that well-being does not raise anymore after a salary of around $75,000. He made his decision after reading an academic article by Daniel Kahneman and Angus Deaton. This week, coverage from various international newspapers on a great new real-life experiment left me no choice but to discuss it again.Ī $70k minimum wage, based on scientific adviceĭan Price, CEO of the Seatlle-based Gravity Payments decided to raise the salary of all his staff to a minimum of $70,000. Only last week I wondered how money affects me. Money: it proves to be the central topic for happiness researchers worldwide.
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