kierangreig comments on Is effective altruism overlooking human happiness and mental health? I argue it is. - Effective Altruism Forum

You are viewing a comment permalink. View the original post to see all comments and the full post content.

Comments (56)

You are viewing a single comment's thread.

Comment author: kierangreig 27 June 2016 08:47:00PM *  2 points [-]

Hi Michael,

You mention the Easterlin paradox a few times in these comments and in you draft paper. I briefly looked into the literature a while ago and I place less weight on the Easterlin paradox than you. Here’s a quick summary of what I found.

Easterlin claimed (p.113-118) that average satisfaction in a country doesn’t increase as a country grows wealthier. Since then there has been a back and forth in the literature but there is now a growing body of correlational evidence that strongly conflicts with Easterlin’s initial claim (for instance, p.3, p.4, p.10, p.12). It seems that the literature now suggests that the relationship between income and life satisfaction is one of diminishing returns but that an increase in income is correlated with an increase in life satisfaction. A nice heuristic to use is that a doubling in income increases subjective well-being by 0.34 standard deviations (p.7).

There has been only limited research into the effect of income on emotional well-being or the affective aspect of subjective well-being. The research there has been suggests that particularly at low levels of income an increase in income correlates with an increase in emotional well-being (p.3, p.8, p.8). A meta analysis on subjective well-being noted that there is a weaker association between income and emotional well-being than income and cognitive well-being (p.3).

Comment author: MichaelPlant 28 June 2016 11:17:26AM 1 point [-]

hello Keiran and thanks for your comment.

I don't discuss the Easterlin Paradox in any depth in the paper because it was largely tangential to the point I was making. It's really interesting and something I've thought about a lot.

Whether you think the Easterlin Paradox is correct or not somewhat depends on what you think it shows in the first place. There are different formulations of this. My reconstruction is that the Easterlin Paradox makes three claims:

  1. Richer people within a country more satisfied than poorer people.

  2. Richer countries more satisfied than poorer countries

  3. As countries have got richer, life satisfaction has remained broadly flat.

What makes the Easterlin Paradox interesting is that the lack of evidence for 3 seems weird given the truth of 1 and 2. That's the paradoxical part: if being richer than other people at particular moments makes us more satisfied, why don't countries get more satisfied if they get richer? Isn't more money always better?

Now, I should point out that no one doubts the truth of 1 or 2. To my eyes, the battle ground is about the 3rd point: does growth increase life satisfaction? There's some dispute over whether it does, but at best economists only find there is a tiny difference e.g see Stevenson and Wolfers. Perspectives can disagree, but I take that a victory for the Easterlin side: if growth does matter, it seems pretty trivial, so lets focus on increasing satisfaction by other means.

(You can also get into a tedious quagmire of how to best assess 3 given the data available. Stevenson and Wolfers look at growth, but it's not really a surprise that growing/shrinking GDP increase/decrease satisfaction. What you really want is long-run growth, which Beja 2015 looks at and concludes that, if long run growth increased by 1%[per year], then life satisfaction would rise from 3 to 3.0027" (life satisfaction was measured on a 1-4 scale) which I mention in reply to Ben Todd below)

So I'm not doubting

It seems that the literature now suggests that the relationship between income and life satisfaction is one of diminishing returns but that an increase in income is correlated with an increase in life satisfaction.

But that refers to point 1, not point 3. What seems to be going on is that income has a large relative effect and a small absolute effect on life satisfaction. The fact that richer people are more satisfied than poorer people doesn't allow you to infer than making those poor people richer would increase their happiness. Analogously, if I change who wins a 100m sprint so yesterday's loser becomes today's winner then it's not obvious (but still possible) I've increase overall satisfaction with the result.

Anyway, this is all analysis in terms of cognitive, not affective well-being. I think the latter is what really matters. The Kahneman and Deaton 2010 paper is really interesting because it shows life satisfaction (cognitive well-being) goes up with income but 'happiness' (affective well-being) plateaus at $40,000ish for household (not individual) income. Given that's a survey conducted in America we might suppose this figure would be far lower elsewhere. It seems unlikely to be the case that $40,000/year/household is the figure beyond which incomes stop affecting happiness for all times and all places. If you conceptualise the relevant figure as "the ability to shameless participate in society" then you'd expect that to change.

As a result, I think more work is required to find out what the level of absolute income is that people require. As the Give Directly study shows, it may be incredibly low and so low that cash transfers do surprisingly little.