The .Plan

Maybe…

The relation between global happiness and income for 2004 with data from the General Social Survey (GSS) is illustrated in Table 2. Those with incomes over $90,000 were nearly twice as likely to report being “very happy” as those with incomes below $20,000, although there is hardly any difference between the highest income group and those in the $50,000 to $89,999 bracket.

…but at what cost?

Finally, we would propose another explanation: As income rises, people’s time use does not appear to shift toward activities that are associated with improved affect. Subjective well-being is connected to how people spend their time. In a representative, nationwide sample, people with greater income tend to devote relatively more of their time to work, compulsory nonwork activities (such as shopping and childcare), and active leisure (such as exercise) and less of their time to passive leisure activities (such as watching TV) (Table 4). The activities that higher-income individuals spend relatively more of their time engaged in are associated with no greater happiness, on average, but with slightly higher tension and stress…

The results in Table 4 also highlight the possible role of the focusing illusion. When someone reflects on how additional income would change subjective well-being, they are probably tempted to think about spending more time in leisurely pursuits such as watching a large-screen plasma TV or playing golf, but in reality they should think of spending a lot more time working and commuting and a lot less time engaged in passive leisure (and perhaps a bit more golf). By itself, this shift in time use is unlikely to lead to much increase in experienced happiness, although it could increase tension and one’s sense of accomplishment and satisfaction.

Despite the weak relation between income and global life satisfaction or experienced happiness, many people are highly motivated to increase their income. 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) (28, 29). An emphasis on the role of attention helps to explain both why many people seek high income — because their predictions exaggerate the increase in happiness due to the focusing illusion — and why the long-term effect of income gains become relatively small, because attention eventually shifts to less novel aspects of daily life.
–Daniel Kahneman et al., “Would You Be Happier If You Were Richer? A Focusing Illusion”, Science, June 30, 2006