See also: Time-series data for income & happiness?
At first approximation, there are two motivations for donating money – egoistic & altruistic.
The egoistic motivation relates to the personal benefit you accrue from giving your money away. The altruistic motivation relates to the benefits that other people receive from your donations. (This roughly maps to the fuzzies vs. utilons (a) distinction.)
The egoistic motivation for donating is scope insensitive
The egoistic motivation for donating is highly scope insensitive – giving away $500 feels roughly as good as giving away $50,000. I haven’t found any academic evidence on this, but it’s been robustly true in my experience.
This scope insensitivity seems pretty baked in – knowing about it doesn’t make it go away. I can remind myself that I’m having 100x the impact when I donate $50,000 than when I donate $500, but I find that when I reflect casually about my donations, I feel about as satisfied at my small donations as I do about my large ones, even after repeatedly reminding myself about the 100x differential.
We’re probably also scope insensitive qualitatively – giving $5,000 to a low-impact charity feels about as good as giving $5,000 to an effective charity (especially if you don’t reflect very much about the impact of the donation, and especially especially if the low-impact charity tells you a compelling story about the particular people your donation is helping).
Effective giving increases happiness, but so does low-impact giving
EA sometimes advocates that giving will increase your happiness. Here’s an 80,000 Hours article (a) to that effect. Here’s a piece by Giving What We Can (a).
I think sometimes implicit here is the claim that giving effectively will increase your happiness (I think this because almost all other discussion of giving in EA spaces is about effective giving, and why effective giving is something to get excited about).
It seems pretty clear that donating some money to charity will increase your happiness. It’s less clear that donating to an effective charity will make you happier than donating to a low-impact charity.
Given the scope insensitivity of the egoistic motivation, it’s also unclear that giving away a lot of money will make you happier than giving away a small amount of money.
It seems especially unclear that the donation-to-happiness link scales anywhere linearly. Perhaps donating $1,000 makes you happier than donating $100, but does it make you 10x as happy? Does donating $2,000 make you 2x as donating $1,000? My intuition is that it doesn’t.
Income increases happiness, up to a point
Okay, so that’s a bunch of discussion from intuition & lived experience. Now let’s look at paper.
Jebb et al. 2018 analyzed Gallup Worldwide Poll survey data on income & happiness. This dataset had responses from about 1.7 million people in 164 countries, so we don’t have to worry about small sample size.
Jebb et al. were curious about the income satiation effect – is there a point at which additional income no longer contributes to subjective well-being? And if there is, where is it?
From the Gallup data, Jebb et al. found that there is indeed an income satiation effect:
Globally, happiness stopped increasing alongside income after $95,000 USD / year.
For Western European respondents, happiness stopped increasing alongside income after $100,000 USD / year. For North American respondents, the satiation point was $105,000 USD / year.
An aside on terminology
“Subjective well-being” is the term social scientists use to think about happiness. Researchers usually break subjective well-being down into two components – life evaluation & emotional well-being. Here are heavyweights Daniel Kahneman & Angus Deaton on how those two things are different (a):
Emotional well-being (sometimes called hedonic well-being or experienced happiness) refers to the emotional quality of an individual’s everyday experience – the frequency and intensity of experiences of joy, fascination, anxiety, sadness, anger, and affection that make one’s life pleasant or unpleasant. Life evaluation refers to a person’s thoughts about his or her life. Surveys of subjective well-being have traditionally emphasized life evaluation. The most commonly asked question in these surveys is the life satisfaction question: “How satisfied are you with your life as a whole these days?” … Emotional well-being is assessed by questions about the presence of various emotions in the experience of yesterday (e.g., enjoyment, happiness, anger, sadness, stress, worry).
Jebb et al. break down emotional well-being further into positive affect & negative affect, which roughly correspond to experiencing positive & negative emotive states.
Life evaluation seems like the more intuitive metric for our purposes here. (It’s also the more conservative choice due to its higher satiation points.) So when I talk about “happiness,” I’m actually talking about “subjective well-being as assessed by life evaluation scores.” My main points would still hold if we focused on emotional well-being instead.
Income increases happiness up to $115,000 / year
Returning to Table 1, we can pull out a couple of takeaways:
- The income satiation point for most EAs is at least $100,000 USD / year.
- Most EAs are in North America and Western Europe.
- The satiation point for life evaluation in Western Europe is about $100,000 USD / year.
- The life evaluation satiation point in North America is about $105,000 USD / year.
- Almost all EAs fall into Jebb et al.’s "high education" bracket: 16+ years of education, i.e. on track to complete a Bachelor’s.
- High-education populations have higher satiation points than low-education populations, an effect that the authors attribute to "income aspirations or social comparisons with different groups."
- The "high education" satiation point is $115,000 USD / year.
- That’s a global figure. The paper doesn’t give a region-by-region breakout of the "high education" cohort; it’s likely that the figure is even higher in the Western Europe & North American regions, which have higher satiation points than the global average.
Essentially, all income earned up to $115,000 USD / year (for college-educated folks living in North America & Western Europe) contributes to one’s happiness.
Putting it all together
We can use the Jebb et al. paper to infer that donations which put your annual income below $115k will probably make you less happy. (And if you’re giving substantial amounts while earning a total income of less than $115k, those donations will probably contribute to a decrease in your happiness.)
Correspondingly, donating amounts such that your annual income remains above $115k probably won’t affect your happiness.
There’s a wrinkle here: it’s possible that much of the happiness benefit of earning a high income comes from the knowledge that you earn a high income, not what you use the money for materially. If this is the case, donating large amounts out of an income above $115k shouldn’t ding your happiness.
So perhaps only a weaker version of the claim holds: once you achieve an annual income above $115,000, you can give away large portions of it without incurring a happiness penalty (having already realized the happy-making benefit of your earnings). But even in this case, donating large amounts out of an income less than $115k still lowers your happiness (because you never benefit from the knowledge that you earn at least $115k).
It’s true that the act of donating will generate some personal happiness. But given the scope insensitivity at play here, you can realize a lot of this benefit by donating small amounts (and thus keeping a lot more of your money, which can then be deployed in other happy-making ways).
From a purely egoistic viewpoint, scope insensitivity lets us have our cake & eat it too – we can feel good about our donating behavior while keeping most of our money.
Conclusion: EA shouldn’t say that effective giving will make you happy
My provisional conclusion here is that EA shouldn’t recommend effective giving on egoistic grounds.
There remains a strong altruistic case to be made for effective giving, but I think it’s worth acknowledging the real tradeoff between giving away large amounts of money and one’s personal happiness, at least for people earning less than $115,000 USD / year (on average, for college-educated people in Western Europe & North America). If you want to give large amounts while avoiding this tradeoff, you should achieve a stable annual income of at least $115k before making substantial donations.
Further, EA should actively discourage people from effective giving if they’re mainly considering it as a way to become happier. Effective giving probably won’t make you happier than low-impact giving, and donating large amounts won’t make you happier than donating small amounts. Saying otherwise would be a false promise.
Thanks to Gregory Lewis, Howie Lempel, Helen Toner, Benjamin Pence, and an anonymous collaborator for feedback on drafts of this essay. Cross-posted to my blog.