Re: Re: Re: Pritchard On Liberal Happiness

In early July, Cassie Pritchard claimed on Twitter that liberalism failed because it assumed economic progress would lead to happiness, which did not happen. I disagreed with her comparison of happiness to income, suggesting instead that happiness correlates with the logarithm of income. After Pritchard responded on her Substack, I replied with a few points.

Pritchard argued that the effect of income on happiness is small, with a correlation of 0.09 in a large dataset. This means that a fourfold increase in income from $50,000 to $200,000 only has a minor impact on happiness, similar to the effect of a headache or being a full-time caregiver for a disabled elderly relative. Pritchard dismissed the importance of caregiving and other major life changes, which she found trivial compared to income changes.

I acknowledged the validity of her point about caregiving but argued that the comparison should be made between rich people's daily happiness and the constant state of being a headache. This comparison makes the impact of income on happiness seem more significant. Pritchard's ultimate source, Kahneman & Deaton (2010), showed that other factors, such as being married versus divorced, obese versus normal-weight, and weekend versus weekday, affect happiness similarly to a 4x increase in income.

Since these factors are also substantial, I believe that income should not be dismissed as irrelevant to happiness.