Most of us don’t have a desire for unlimited wealth

By Emily Reynolds

Do humans always want more, or are we sometimes just happy with our lot? This debate has long raged in multiple disciplines: economics, politics, and even philosophy. And whether an unlimited desire for more is inherent or a product of capitalism is equally hotly contested.

Paul G. Bain from the University of Bath and Renata Bongiorno from Bath Spa University explore this question in a new paper published in Nature Sustainability. They find that the assumption we always want more, no matter how much we have, may not be completely accurate: while some of us do have unlimited desire for wealth, they are not the majority.

The first study included around 2000 participants from both advanced and economically developing countries, including the US, UK, France, South Africa, China, Russia, and Brazil. As part of a larger study, participants were asked to imagine their absolutely ideal life, and to consider how much money they would want in this ideal life. They were then asked whether they wanted to enter one of eight hypothetical lotteries, each with a prize ranging from $10,000 to $100 billion. After this, participants indicated the most important change they would make with the money.

The second study recruited nearly 6000 participants from a wider number of countries, including from the Middle East, Africa, Central America, North America, South America, Asia, Europe, and Oceania. Participants in this study completed the same measures as in the first.

The results were similar in both studies. Relatively few participants chose the smallest values, but there was a peak between $1 million and $10 million, with a large number of participants choosing these lotteries. Interest in the larger figures then declined, with only a small number of people choosing $1 billion. But a significant number of people chose the largest, essentially “unlimited” figure of $100 billion. In the first study, for instance, 32% of Americans picked this amount, though only 8% of those from China chose this. In the second study, Indonesia had the highest proportion of participants selecting unlimited amounts at 39%, and Russia the lowest at 11%. However, it’s worth noting that although a substantial number of people did pick this “unlimited” amount of money across the studies, they were always a minority.

In terms of the nationality of participants, the proportion of those selecting unlimited amounts was similar across more and less developed countries, despite the fact “luxury and consumption” is encouraged in more developed countries, as the authors point out. Where there was a difference, however, was between countries where the group is prioritised over the self: participants from these countries were more likely to select the unlimited lottery than those from more individualistic nations. Younger people and those who live in cities were also more likely to select the unlimited lottery, though there was no variation by gender, class, education or political ideology.

When asked what they would use the money for, those who selected the unlimited lottery were more likely to say they wanted to use their money to address social problems — perhaps why this choice was more prevalent in collectivist societies. However, the majority of these participants still stated they would use the money for themselves. When asked about their values, participants who chose the unlimited figure were also no more likely to care about the welfare of others, but did place more importance on their own personal interests.

The study suggests that the idea we all want unlimited resources is probably not accurate. Further research could help us pinpoint exactly what drives our desire for certain amounts of money, limited or unlimited: for instance, it would be interesting to know whether people’s views on extreme wealth and inequality influence their decisions.

Overall, the study’s results could help us move towards a more sustainable and less unequal way of thinking about resources and wealth. As the team writes, “normative beliefs guide behaviour even as they are inaccurate”: in other words, we sometimes fail to act on our own values because we think we are in the minority. Having limited wants, the study suggests, is normal; understanding this more thoroughly could help us consume less, even as materialistic societies encourage us to consume more.

SOURCE:

https://digest.bps.org.uk/2022/07/05/most-of-us-dont-have-a-desire-for-unlimited-wealth/#more-47935(accessed 14.7.22)

Can’t Buy Happiness? Research On Money, Digested

By Emma Young

Poverty can have long-lasting psychological effects. But for people who live above the poverty line, expectations about how much money we should have or need, as well as decisions about what to spend our money on and what to save for the future, can all affect psychological wellbeing, too. However, some well-worn ideas about this are being challenged, as we explore here.

Is it true that money can’t buy you happiness?

Received wisdom is that it can’t — at least, so long as your income already covers your basic needs plus a few conveniences, such as a car, perhaps. But according to a recent paper in PNAS, this is not correct. Matthew A. Killingsworth at the University of Pennsylvania analysed data from more than 33,000 employed adults in the US, who had been asked to report on their own wellbeing at random timepoints via a smartphone app. Contrary to the findings of some highly influential earlier work, the analysis of over 1.7 million reports found no evidence for a “wellbeing plateau” above an income level of US$75,000 a year. Instead, Killingsworth found that wellbeing rose with income, with incomes in this study ranging from US$15k a year to over US$480,000. “This suggests that higher incomes may still have potential to improve people’s day-to-day wellbeing,” even in wealthy countries, he writes.

However, it’s worth stressing that the data shows that wellbeing increases by a similar amount every time income is doubled — so an increase of $30,000 to $60,000, for example, is associated with a much bigger rise in happiness than an increase of $120,000 to $150,000.

What should you buy to maximise happiness?

Not more things, according to most research — but there’s a caveat to this, which we’ll get to shortly.

Certainly, there’s plenty of evidence that buying experiences rather than possessions makes for greater wellbeing. For example, in 2020, a team that included Killingsworth but which was led by Amit Kumar at the University of Texas, Austin reported a study of 2,635 US-based adults, who received regular texts during the day asking about their current emotions and any purchases. The researchers found that people were happier when spending on experiences, such as attending a sporting event or eating at a restaurant, than when buying goods that cost the same amount, such as jewellery or clothing.

Another study, published in Social Psychological and Personality Science, reported that although most people say they would choose to have more money over more time, participants who chose money reported being happier (the participants’ household income and free time were taken into account in this analysis). The team did also find that happier people are more likely to choose more time vs more money. But their analysis suggests that the effect does work in both directions, with a prioritization of time vs money and greater happiness boosting each other. (The participants in this study were thousands of Americans representing a range of ages, income levels and occupations.)

However, there is also evidence that buying experiences and time really only makes you happier than buying objects if you’re already reasonably well-off, compared with those around you. As we reported in 2018, research (yet again in the US) has shown that less well-off people get just the same — if not more — happiness from buying objects.

How does income disparity affect happiness?

People living in areas where incomes are more similar tend to report greater wellbeing — and this holds not just for overall high-income regions, such as Scandinavian countries, but regions where money isn’t used much at all.

There’s plenty of research finding that it’s not so much how much we earn (above a basic level) but how much we earn compared with those around us that affects wellbeing. In one recent study of this, a pair of researchers analysed decades worth of data from the US and also several western European countries, including the UK. They found that, in Europe especially, rising levels of income inequality were associated with higher levels of happiness — up to a critical point. Beyond that point, happiness dropped.

The researchers think that limited inequality is encouraging — people see that some social mobility is possible and expect that they might achieve it themselves. However, when income inequality becomes too high, “more aspiring individuals may replace their upward mobility dream with despair and feel jealous of the rich”.

“Too high” was notably higher for the US than for Europe. The researchers think this could be because even though there is lower social mobility and also greater income inequality in the US compared with western Europe, Americans are greater believers in the possibility of social mobility.

One last note on income inequality: highlighting it can of course be important. Certainly, there’s work finding that visible reminders of inequality can make disadvantaged people more likely to want to do something about it.

What about giving money away….

Throughout human history and across cultures, humans have helped one another in times of need — that, at least, is the message from the influential Human Generosity Project. Anthropological studies of a wide range of communities suggest that we are generous by nature. Though this research has focused on generosity within communities, we are of course also motivated to give anonymously, in the form of charitable donations. Studies in this field have found that giving boosts happiness, and also that happier people give more, creating a virtuous spiral of increasing benefits.

Other studies have investigated the factors that influence our decisions to give to charities. A 2019 paper in Nature Communications, which analysed millions of dollars of donations given via the GoFundMe Platform, found that donors gave significantly more to people who shared their surname. Also, men and women donated more at times when donors of the opposite sex were visible on the screen.

That same year, we reported on a study finding that simple “moral nudges” encourage people to donate much more to charity. Nudging people to reflect on what was the morally “right thing” to do increased actual donations by close to half.

….And keeping hold of it?

You really want to save for a deposit on a flat, or for your retirement — but that ridiculously expensive dress, or shirt, or holiday is just so appealing. Most of us have experienced feelings like this. It is much harder to put money away for the future than it is to spend it now. Finding ways to close the gap that we feel between our present and future selves should help, in theory. And a questionnaire that got participants in Portugal to think more about their own future ageing did prompt them to invest more in retirement funds, reports a 2018 study in the Journal of Applied Social Psychology.

Other groups have looked at different practical ways to encourage people to save. In 2020, a team led by Hal Hershfield at UCLA reported a study of thousands of new users of a financial technology app. They found that suggesting smaller, more regular deposits vs larger, less regular ones encouraged less well-off people to save. In this US study, three times as many people in the highest, compared with the lowest, income bracket signed up to make a $150 deposit each month. When this was framed as $5 per day instead, the difference in participation was eliminated (even though the total savings for each individual were, of course, the same).

There’s also evidence that some personality traits put you at greater risk of financial hardship and even bankruptcy. Perhaps surprisingly, one of these traits is agreeableness. The reason, according to the team behind this 2018 report, is that agreeable people value money less, and so are more likely to mismanage their own. “The relationship was much stronger for lower-income individuals, who don’t have the financial means to compensate for the detrimental impact of their agreeable personality,” commented co-author Joe Gladstone at UCL.

This article also appears in the summer issue of The Psychologist magazine.

SOURCE:

https://digest.bps.org.uk/2021/07/01/cant-buy-happiness-research-on-money-digested/#more-42762(accessed 3.7.21)

People Prefer More Attractive Financial Partners — Even Ones Who Lose Them Money

By Emma Young

Physically attractive people are routinely judged to be “superior” in other ways — to be more trustworthy, for example, and honest, and intelligent. However, evidence for the unwarranted “attractiveness halo” effect has tended to come from studies that have involved snap-judgements with no feedback or repercussions for the people doing the judging. Gayathri Pandey and Vivian Zayas at Cornell University, US, wanted to explore how this bias plays out in the longer term, when contradicted by actual data. If, say, we’re given information that an attractive investor is actually losing us money, while an unattractive investor is securing profits, surely we’ll quickly drop that bias in relation to these individual people at least? Alarmingly, the pair’s new paper in the British Journal of Psychology suggests not.

In an initial study, 91 students were each shown four photos of purported “financial partners” (all of the same gender). Two of the composite faces had independently been rated as attractive and two as unattractive. The students were given a hypothetical $2000 and told to make as much money as possible. Across 50 trials with all male partners and another 50 with all female partners, they had to click on a face to choose one with whom to invest the money, and each time, they got feedback as to whether they’d lost or gained money.

Before they started, the students were informed that some of the partners would be more helpful than others. They were also encouraged to try them all, to find out which were better and which worse. What they were not told was that there were in fact two equally disadvantageous partners (who delivered some relatively large immediate gains but smaller long-term profits or even long-term losses) — one attractive and one unattractive — and two advantageous partners (who conferred better long-term profits), again, one attractive and one not.

As expected, the students started out favouring the attractive partners. But even after receiving 50 trials’ worth of feedback about the performance of each individual, they were still swayed by attractiveness. In fact, they preferred the attractive-disadvantageous partner over the unattractive-advantageous partner. They also reported finding the attractive partners more helpful. (There was some evidence of improved performance in the second block of trials, though the team’s analysis suggests that this reflected better use of the feedback, rather than getting significantly better at discounting attractiveness.)

Perhaps 50 trials weren’t enough for the participants to accurately discriminate between helpful vs unhelpful partners, and discount attractiveness, the researchers reasoned. So they ran another experiment, this time with 135 participants who each completed 100 trials (with either all male or all female partners).

The results were different — but not drastically so. As the participants progressed through the 100 rounds of feedback, they did come to show a preference for the advantageous partners. However, after suffering a loss, they were still quicker to return to an attractive vs unattractive partner, and by the end, the attractive-disadvantageous partner was still as popular a choice as the unattractive-advantageous one. “Even with more opportunity to learn about partners’ profitability, time did not appreciably moderate the effect of attractiveness,” the researchers write.

The participants were asked afterwards about how trustworthy they perceived the four partners to be. The attractive two were clearly favoured. In fact, the researchers’ analysis suggests that a perceived association between attractiveness and trustworthiness explained the results — we seem to use attractiveness as a signal of trustworthiness, and rely on it, even in the face of financial losses (albeit hypothetical ones).

It’s possible of course that with more trials, which could provide a clearer picture of trends in financial gains and losses, the attractiveness bias would have been eliminated. Only further research will tell. And as the researchers themselves note, a study that involved American college students, just White faces and hypothetical rather than real money is only a starting point for research in this area, rather than the final word. However, the new work certainly does suggest that the attractiveness halo colours our judgements, at a cost to ourselves, for far longer than might have been assumed.

SOURCE:

https://digest.bps.org.uk/2021/06/09/people-prefer-more-attractive-financial-partners-even-ones-who-lose-them-money/#more-42524(accessed 10.6.21)

Why Are We So Quick To Scrutinise How Low-Income Families Spend Their Money?

By Matthew Warren

As shops re-opened in the UK this week, social media users were quick to pour scorn on the hundreds of eager shoppers who queued up to get in. Yes, it’s unclear whether it was a good decision to re-open businesses — but there was a certain snobbishness to many of these posts. Most of the ire was directed at those lining up outside Primark, which sells clothes at prices more affordable to those on low incomes than most other high street stores. Meanwhile, queues also formed outside high-end shops like Selfridges and Harrods — but these shoppers somehow escaped the wrath of most social media commentators.

This situation seems to reflect a broader inequality in how we judge other people’s purchase decisions: we’re much more willing to scrutinise — or even dictate — how people on lower incomes spend their money compared to those on higher incomes. There are countless examples of this — think of the low-income mother who is criticised for treating her children to a rare meal out, or the refugee who is shamed for owning a smartphone.

Now a new study in PNAS provides some clues as to the origins of this bias. Across a series of 11 studies involving more than 4,000 participants, Serena Hagerty and Kate Barasz from Harvard Business School find that we tend to believe lower-income people need less than those on higher incomes, and that this in turn restricts our perceptions about what is acceptable for this group to buy.

In the first couple of studies, participants read about Joe, who was described as having either a low- or high-paying job. They learned that Joe had won a $200 gift card which he spent on a flat screen TV. They then rated five statements which measured how “permissible” they thought his purchase was (e.g. “He made a responsible purchasing decision” and “He deserves to buy what he did”). Those who read that Joe had a low income rated his purchase as less permissible than those who read that he had a high income, or who were given no information about his income.

In a subsequent study, participants read about a woman looking for a child’s car seat who ultimately chooses to buy the more expensive of two options. Again, those who read she had a low income thought her decision was less permissible than those who read she had a high income. In fact, the team observed the same pattern for a range of products: participants who rated the permissibility of 20 different goods and services, from household appliances to pet products, indicated that almost all of these were less acceptable for a lower-income person to buy.

So people clearly think that purchasing the very same product is often less acceptable for a low-income than high-income individual — but why is that the case? The researchers thought it could come down to people’s perceptions of the needs of others. So, in the next few studies, they looked at which purchases participants deemed necessary.

The team repeated the car seat scenario, for instance, finding that those who read that the mother was on a low income believed that the purchase was less necessary than those who read she was on a high income. Similarly, in another study, participants read about a low- or high-income family looking for a new house, and were asked to rate how necessary it was that the house had 20 different features, such as a garage or storage space. Of these 20 features, 17 were rated as more necessary for the high-income family. Disturbingly, these even included basic requirements like “close to hospitals” or “a neighbourhood that is safe/secure”.

These findings suggest that people believe low-income individuals need particular items less than high-income individuals — and further studies showed that purchases that were considered less necessary were, in turn, considered less permissible.

Finally, the researchers demonstrated that these perceptions actually influence people’s behaviour. In one study, participants could help a hypothetical family decide what to buy. Participants who read that the family was on a low income were much less likely to allocate money to “low permissibility” products like a television than those in the high-income condition. And when deciding whether to gift a low-income individual either a $100 grocery voucher or a $200 electronics voucher, only a quarter of participants went for the latter, even though it was worth twice as much. More than half said they would give a high-income individual the electronics voucher, however. “Paradoxically, the result was that participants effectively allocated more money to higher-income people than lower-income people,” the authors note.

These last findings have worrying implications when it comes to thinking about charitable donations or how resources are distributed to the less fortunate, write the authors. If people hold such a narrow view of the needs of those on lower incomes, then it’s easy to see how resources could be allocated disproportionately to the most basic necessities — food and housing, say — while ignoring higher-level needs that are seen as less “permissible” — access to the internet or to recreation facilities, for instance.

The research could also help explain why it is so common to hear politicians and opinion writers moralising about what poorer people should and should not spend their money on, or why state provisions for those on lower incomes often barely meet the most basic standard. “In essence,” the researchers conclude, “people seem to conceptualize necessity differently for lower-income versus higher-income others, such that the “wants” of the poor evolve into the “needs” of the wealthier.”

SOURCE:

https://digest.bps.org.uk/2020/06/16/why-are-we-so-quick-to-scrutinise-how-low-income-families-spend-their-money/(accessed 22.6.20)

This is How Much Happier Therapy Makes You Than More Money

Money can buy happiness, as long as you spend it on therapy.

Money.

You need enough to live, but loads of it doesn’t make you that much happier.

It’s something we’ve all heard — whether it’s from psych studies or rich people — but do we behave as though it’s true?

I sometimes wonder.

To help convince our inner Mr Burns, here’s a nice statistic from a study done by researchers at the Universities of Manchester and Warwick, who compared the happiness gains from money to that gained from psychological therapy (Boyce & Wood, 2009).

They found that therapy was 32 times as cost effective as money in making you happier.

They reached this figure by looking at thousands of people who’d started therapy and compared them with others who’d had large increases in their income.

It turned out that to get the same increase in happiness from $1,300 spent on therapy, a person would have to get a mammoth pay rise of $42,000.

Hardly likely, right?

The study’s lead author, Chris Boyce, said:

“Often the importance of money for improving our well-being and bringing greater happiness is vastly over-valued in our societies.

The benefits of having good mental health, on the other hand, are often not fully appreciated and people do not realise the powerful effect that psychological therapy, such as non-directive counselling, can have on improving our well-being.”

If this is true, why are many governments so obsessed with economic growth and apparently so little concerned with mental health?

Take the Chinese, for example, who are getting much richer, but no happier. That’s just one of many, many examples.

Although economic growth in many major economies is less dramatic than in China, the effects on happiness are about the same: zilch, or close enough.

Any idiot knows the answer to this one: it’s because money makes the world go round, world go round, world go round…

And yet it makes me think we’re all idiots for nodding our heads sagely that money can’t make you happy, then off we all go to put in another 12 hour day, or whatever it is.

Think how much happier the world would be if, instead of annual pay rises or bonuses, we were all sent off to talk to a sympathetic stranger for a few hours.

SOURCE:

http://www.spring.org.uk/2014/06/this-is-how-much-happier-therapy-makes-you-than-more-money.php?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+PsychologyBlog+%28PsyBlog%29(accessed 5/6/14)

Social disapproval leads to longer lasting behaviour change than cash fines

If you want to influence people's behaviour by hitting them where it hurts, the wallet seems like a great place to aim. Say a local authority began fining litter-bugs on the spot, you can bet the streets would soon be cleaner. But there's a downside. People begin to see the behaviour in terms of a cost-benefit analysis. They stop littering not because it's wrong, but because it makes financial sense. This approach can also encourage would-be litterers to perceive other people's tidy behaviour as a financial rather than a moral choice. None of this matters too much until the litter wardens go home. Absent the financial threat, litterers are quick to start dumping their junk again.

It's not realistic to have a constant method of enforcement in place. So what approach will be more effective than the time-limited influence of fines? A new study by Rob Nelissen and Laetitia Mulder suggests that social disapproval is more effective than financial sanctions because the effects linger on even after the threat of disapproval is lifted.

The researchers invited 84 participants to sit alone at computer cubicles, to play several rounds of a public goods game in groups of four. Players started with 4 Euros each, and every round they chose how much to place into a group kitty. At the end of each round the group stash was multiplied 1.5 times and shared among the four players. The anti-social temptation is to free-load, to enjoy the proceeds from the group payout without contributing a fair share.

One third of the groups played under threat of financial sanction. Each round, these participants saw the contributions of the other players and could choose to fine others one Euro. Players were also told about any fines they'd received. Another third of the groups played under threat of social disapproval. Each round participants could choose to direct their disapproval at other players. They also learned how many players had frowned on their tactics. There was also a control group with no sanction system in place.

For the first seven rounds, both financial threats and social disapproval threats increased fair play (compared with control condition), but the effect of fines was greater. Crucially, at the seventh round, the players in the sanction conditions were told there was a computer malfunction and that the final three rounds would be played without any fining or disapproval system in place. The key test was how they'd behave once the threat of sanction was lifted.

With the sanctions gone, the cooperative play of participants in the financial condition fell away quickly, more so than in the social disapproval condition. Indeed, by the tenth and final round, players in the financial condition played the same selfish style as control condition players. In contrast, the players in the social disapproval condition continued to show signs of increased fair play.

"Clearly this has important implications for public policy," Nelissen and Mulder concluded. "Our results suggest that successful norm induction requires public communication of social (dis)approval, not only because it increases the salience and thus the effectiveness of norms in guiding behaviour, but also because it makes them stick even if people are not consistently punished for their violations."

_________________________________

SOURCE:

RESEARCH DIGEST: http://www.researchdigest.org.uk/

Nelissen, R., and Mulder, L. (2013). What makes a sanction “stick”? The effects of financial and social sanctions on norm compliance. Social Influence, 8 (1), 70-80 DOI:http://dx.doi.org/10.1080/15534510.2012.729493

Author weblink: http://www.tilburguniversity.edu/webwijs/show/?uid=r.m.a.nelissen