What makes people happy? Why the rich so poor at allocating time for things that make them happy

Why are we reading so much about happiness of late?

Fortunately for those of us who want to maximize our personal happiness, happiness has become an increasingly important topic of research. Both academics (who increasingly are able to draw from a multitude of disciplines (psychology, sociology, medicine, and economics) and politicians (who understand that an unhappy populace can send them packing), have been driving this growth.

The reason you read so much about happiness in LifeTwo (here is a link to all of our happiness posts) is that it is where all of our midlife topics intersect including health, career, and relationships. The pursuit of happiness (or life satisfaction if you prefer) is why we do what we do in all of these categories. We are also fascinated with the quickly evolving discipline of positive psychology, and specifically as it applies to the decisions made in middle age.

What can be learned about happiness by looking at it from a nations level?

A lot. Happiness can be such a vexing topic that it is best sliced from every possible angle--from a very personal introspective look to global surveys--to see what trends/lessons can be discerned. Just as the priorities of individuals change as they mature so do those of counties as they develop and move from a focus of material well-being to other things such as "stable social relations, job satisfaction, health etc." But countries, like people, chase happiness in different ways (that is with different social systems). By looking at these we can draw interesting conclusions that can be one more data point in understanding what makes people happy and why.

An analysis of various studies taken on happiness was able to draw strong correlations with happy versus less-than-happy societies. In specific, by analyzing 22 countries, researchers were able to come up with a list of commonalties of happy societies:*

1. High degree of trust in fellow citizens
2. Low amount of corruption
3. Low unemployment
4. High level of education
5. High income**
6. High employment rate of older people
7. Small shadow economy
8. Extensive economic freedom
9. Low employment protection
10. High birth rate

Even though happiness levels have been generally stable, countries that increased the above factors saw greater increases in life satisfaction than those that didn't.

If it is true for societies, why not for individuals? In other words, could a key to happiness be spending time around people you trust, working (past normal 'retirement' age), continuing education (both formal and informal), and raising a family? While the nation-level study was not intended to be the basis of an individual self-help project it's hard not to want to draw some conclusions in this regard.

What do we know about the 'happiness paradox' whereby income over the past several decades has increased but overall happiness levels have not?

It turns out that if you look at the work of two Princeton professors, economist Alan B. Krueger and psychologist and Nobel laureate Daniel Kahneman, this paradox might not be much of a mystery after all. In fact, it might be as simple as people's mis-allocation of time/resources and not engaging in activities that really promote their happiness.***

The table below shows the results of a Kahneman study in 2004 on the "happiness" level of various activities and the time spent on those activities. It goes without saying that one way to boost happiness is to spend more time doing those things that boost happiness and less time on those that don't.

Intimate relations: time: 0.2; (happiness level: 4.74)
Socializing after work: time: 1.2; (happiness level: 4.12)
Dinner: time: 0.8; (happiness level: 3.96)
Relaxing: time: 2.2; (happiness level: 3.91)
Lunch: time: 0.5; (happiness level: 3.91)
Exercising: time: 0.2; (happiness level: 3.82)
Praying: time: 0.5; (happiness level: 3.76)
Socializing at work: time: 1.1; (happiness level: 3.75)
Watching TV: time: 2.2; (happiness level: 3.62)
Phone at home: time: 0.9; (happiness level: 3.49)
Napping: time: 0.9; (happiness level: 3.27)
Cooking: time: 1.1; (happiness level: 3.24)
Shopping: time: 0.4; (happiness level: 3.21)
Housework: time: 1.1; (happiness level: 2.96)
Childcare: time: 1.1; (happiness level: 2.95)
Evening commute: time: 0.6; (happiness level: 2.78)
Working: time: 6.9; (happiness level: 2.65)
Morning commute: time: 0.4; (happiness level: 2.03
[Study: Kahneman et al. (2004)]

Source for the two studies above: Deutsche Bank Research [Link is to a PDF of their report].

It should be noted that the survey consisted of employed women in Texas (this was due to a desire by the researchers to test a relatively homogeneous sampling). Studies using more diverse samplings, including men, are in the works. There are a number of key takeaways from the study, the most important of which is highlighting the exaggeration of the money-happiness link. From Princeton University:

"The belief that high income is associated with good mood is widespread but mostly illusory," the researchers wrote. "People with above-average income are relatively satisfied with their lives but are barely happier than others in moment-to-moment experience, tend to be more tense, and do not spend more time in particularly enjoyable activities."

People's mis-belief of the strength of money-to-happiness can end up leading to less than optimal decisions when it comes to allocating time:

"Despite the weak relationship between income and global life satisfaction or experienced happiness, many people are highly motivated to increase their income," the study said. "In some cases, this focusing illusion may lead to a misallocation of time, from accepting lengthy commutes (which are among the worst moments of the day) to sacrificing time spent socializing (which are among the best moments of the day)."

But I don't particularly care about country-level happiness or academic research, what does this say about how I can become happier?

What does all of this academia mean to you? Simple. Figure out what really makes you happy. Take some time and write a list. Then when that is done, figure out how to spend more time doing it. Obvious, yes. But if you look at the results of the study above, people generally are terrible at spending the most time on the things that bring them the most joy. [Interestingly, the wealthier you are the more it appears you mis-allocate your time (which might explain this).]

It goes without saying that the realities of life will dictate how we spend much of our time, but as the Princeton studies noted many people do more of things they don't like just to be able to buy things that don't bring them happiness. This process results in a net loss of happiness as they do not have the time to do things that would make them happy. A good example is exercising. On the whole, exercising brings happiness but spend very little time on it. Figuring out how to work exercise into a schedule is highly likely to produce positive returns. (One example that has worked for me was finding out other people at my work who also enjoyed working out but similarly "couldn't find the time." We coordinated our schedules to work out together where we accomplished not only our exercise goals, but also covered some work topics and out-of-office socializing. It truly was a net positive gain.

Sorry, but when citing so many references, qualifying notes are required

*The factors listed for nations' happiness are not weighted and are correlations, not causations. Furthermore, health, crime, religiousnesses and life expectancy were all excluded from the list for technical data collection reasons though they certainly could be significant "happiness influencers".)

**It's easy to be confused by the inclusion of 'high income' with the understanding that increased income does not lead to increased happiness. To help explain is an excerpt from the Deutsch Bank report cited in this posting:

International comparisons demonstrate that income is only weakly
correlated with happiness and this is especially true at higher
incomes. This is a well-known finding of happiness research. The
explanations given for the weak correlations are adaptation effects
and the observation that the relative income position is more
important than absolute income.

Within a country, however, richer people do tend to be more satisfied
with life than poor people. The direction of the causality is, however,
not completely clear: some studies show that happier young people
earn higher incomes in later life. Applied to entire economies this
would mean that first a happy environment has to be created and
that a proportion of the return would subsequently be achieved in
the form of higher national income.

***Another reason that has been noted for the flat levels of happiness despite increases in GDP could be that the prescribed scale always remained fixed between 1 and 10 (or 1 to 3 or similar) and that the interpretation of the scale values has changed over time.

h/t: Wil Willkinson (Cato Institute)

For those who want to really dig into this topic we recommend the book "Happier" by Harvard's Tal Ben-Shahar. Amazon link: Happier: Learn the Secrets to Daily Joy and Lasting Fulfillment