Money may not buy happiness, but change leaves most men short-changed
By Peter Martin, Economics Correspondent | smh.com.au | 16 November
What's a marriage worth? To an Australian male, about $32,000.
That's the lump sum Paul Frijters says the man would need to receive out of the blue to make him as happy as his marriage will over his lifetime.
An Australian woman would need about $16,000. But when it comes to divorce, the Australian male will be so devastated it would be as if he had lost $110,000.
An Australian woman would be less traumatised, feeling as if she had only lost $9000.
Recently named this year's Best Australian Economist under 40 by the Economic Society of Australia, the Queensland University of Technology professor knows this because he has been mining a unique set of data that has tracked the happiness and major life events of about 10,000 Australians once a year since 2001.
"These are real people to whom unexpected things happen. They weren't selected because these things would happen, and we can compare their happiness before and after," Professor Frijters told The Age after presenting his findings at the Australian National University.
Asked to describe how satisfied they are with their lives on a scale of 0 to 10, the Australians surveyed most often use the number 8, but the answers change after (and sometimes in anticipation of) major life events and also after sudden changes in income.
That's enabled the professor to put dollar values on the effects on happiness of major events such as marriage, divorce and birth; or, as he puts it, to calculate their "psychic costs" or "psychic benefits".
The birth of a child turns out to bring both. It makes parents the happiest before it happens and then after some months slightly less happy than they would have been without the birth, which is why Professor Frijters puts low dollar values on the lifetime boost to happiness that flows from a birth — for the mother around $8700, for the father $32,600.
"Losing a loved one has a much bigger effect than gaining a loved one. There's a real asymmetry between life and death," he says.
"This shouldn't surprise us. Human beings seem primed to notice losses more than gains." The death of a spouse or child causes a woman $130,900 worth of grief according to Frijters' calculations. It costs a man $627,300.
"This isn't the value of the life that's lost; that would be much higher," he says. "This is just the effect on the happiness of one person flowing from a death."
Asked why his calculations show men much more affected by life's events than women, Professor Frijters says he doesn't know.
"But it does tend to give me confidence in the calculations. We know for instance that marriage improves the lives of men much more than women."
Some of the results fit in with stereotypes. Women get a psychic boost of $2600 from moving house. Men suffer psychic pain of $16,000.
Professor Frijters' dollar figures are lower than those arrived at by other methods.
He says that's because he finds that money has a greater effect on happiness than previously thought.
What's it worth?
Happiness converted to dollars
Woman Man
|
Marriage |
$15,600 |
$31,600 |
|
Birth of child
|
$8700 |
$32,600 |
|
Separation
|
$8900 |
$8900 |
|
Death of loved one
|
$130,900 |
$627,300 |
|
Illness
|
$50,300 |
$360,000 |
|
Moving home
|
$2600 |
$16,000 |
Lump sum, average of 5%, 10% discount rate
Source: Frijters, Johnston & Shields, Happiness Dynamics with Quarterly Life Event data, 2009
First published by Smh.com.au on November 16 2009
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