To be happy, it’s not enough to have money; you need the people around you to have less.
But – and here’s the important part – the poorer people can’t live too close.
That’s an insight gleaned from a field of study that focuses on the complex relationship between cash and happiness.
All of this requires some explaining.
Start with the famous observation of the 19th century British philosopher John Stuart Mill: “Men do not desire to be rich, but to be richer than other men.”
By this rationale – known as the relative-income hypothesis — rich people should be happier when they live among the poor, sociologists have suggested.
But, not surprisingly, studies, as well as harsh experience, show that living in a poorer neighborhood reduces happiness.
How to resolve this? Along came Glenn Firebaugh of Pennsylvania State University and Matthew Schroeder of the University of Minnesota with a 2009 study that says Americans tend to be happier when they live in richer neighborhoods in poorer counties.
Using data from the U.S. census as well as the American National Election Studies — highly regarded voter surveys run by Stanford University and the University of Michigan – Firebaugh and Schroeder based their findings on the responses of 1,266 individuals in 849 neighborhoods within 433 counties.
The result: “Americans,” Firebaugh and Schroeder concluded, “tend to be happiest when they live in a high-income neighborhood in a low-income region.”
In an interview, Firebaugh said that people probably don’t seek out a house in a poor county just to feel better about themselves. But they come to know their surroundings, and may realize that they’re more fortunate than distant neighbors. And that allows people to feel good about themselves and therefore, happier.
“You see it when you’re driving to work and realize that most people in the surrounding area don’t live in houses as nice as yours,” Firebaugh said. “People compare themselves to other people, and it does affect happiness.”
Stephen Matthews, a Penn State sociologist and colleague of Firebaugh’s, concurred. He pointed out that he earns a good salary living in State College within Centre County, where the poverty rate is 19 percent (by comparison, it’s 13 percent throughout Pennsylvania). “If you’re relatively wealthy in a poor county, you look like you’re doing well. That makes sense to me.”
But, Matthews stressed, measuring happiness is complicated stuff, and relative income isn’t the only important factor.
“I’ve had two surgeries and a visit to the ER this year,” said Matthews, 53. “That doesn’t make me happy. I have good days and bad days like anyone else.”
Other money-happiness studies reflect aspects of Firebaugh’s. For example, a 2010 British study showed that to be happy, people have to see themselves as being more highly paid than their friends and work colleagues.
An international academic study this year revealed that spending money makes people happy provided they’re spending it on creating more free time for themselves, such as hiring a house cleaner or paying for a car wash.
And a widely quoted Princeton study from 2010 showed that $75,000 is a kind of magic annual salary in relation to happiness. Basically, people’s joy increases along with their income until they are making $75,000 a year. After that, no matter how much more people make, happiness does not rise.
To understand the Firebaugh thesis in real life, it’s helpful to look at Haddonfield, one of the clearest examples of a well-off community in relatively poorer Camden County.
The county’s 13 percent poverty rate is more than four times Haddonfield’s rate, which is less than 3 percent, government figures show. Camden County’s poverty rate is nearly twice that of neighboring Burlington (7.8 percent) and Gloucester Counties (7 percent).
Asking Haddonfield residents to assess their happiness compared with poorer people in the county proved to be a futile task. No one wanted to respond — which isn’t surprising, said John Iceland, yet another Penn State sociologist who studies happiness. “People feel uneasy talking about privilege.”
What people in Haddonfield did say is that they’re cognizant of poverty outside their community, especially in nearby Camden City, where the poverty rate is more than 40 percent.
“I’m aware of the profound disparities,” said Rebecca Bryan, 53, a nurse-practitioner who grew up in Haddonfield and runs the Wellness Center in UrbanPromise, a ministry serving young people in Camden. “The health needs and how children in poverty live has always stunned me, being just 15 minutes from Camden.”
A friend of Bryan’s, Karen Talarico, is executive director of Cathedral Kitchen, the largest provider of emergency food in Camden.
She lives in relative comfort in Cumberland County, the poorest county in New Jersey with a poverty rate of 20 percent.
“Half my employees live in Camden, and migrant workers in the county where I live pick radishes on their knees,” she said. “I live on a 30-acre farm in the country. I’m not going to answer you regarding my relative happiness. But I will say I’m grateful that I’m fortunate.”—