The lottery question
However, there is another measure of happiness: do people evaluate their lives as satisfactory? By this definition, Deaton and Kahneman found no limit to the uses of money: extra income, at any level, was correlated with higher levels of life satisfaction.
More recently, psychologists Paul Bain and Renata Bongiorno changed the focus: instead of asking how much money was enough, they invited survey participants to envisage their absolutely ideal life. Then they asked how much money would be required to achieve that life if it came in the form of a lottery win. Those lottery prizes ranged from US$10,000 (for those whose absolutely ideal life involves replacing the curtains and upholstery) to US$100 billion (for those whose absolutely ideal life involves a great deal of drama about buying Twitter). Most people, however, did not favour the top prize. A US$10 million lottery prize was a popular choice.
Why? One possibility is that nobody really has a clue how to answer the survey question, and US$10m was the central answer, 1000 times more than the minimum and 1000 times less than the maximum.
Another is that people are as naive as my friend. They don't realise that — after buying a nicer house and a nicer car, paying off their debts and setting up an ample pension — they would discover that they could really use another couple of million dollars.
Too much choice?
The writer Malcolm Gladwell has another theory. As a guest on the No Such Thing As A Fish podcast, Gladwell argued that the problem with US$100b is that you have unlimited choice. Simple decisions (pack a lunch, or buy a sandwich?) become impossibly complex (dine in Paris, or Copenhagen, or just have my personal chef prepare something on my plane?). Life is cognitively overwhelming.
Another problem, says Gladwell, is that all the challenge is removed from life. You like collecting stamps, or key rings, or Beanie Babies? Forget it! You can buy them all, before that lunch in Copenhagen if you wish.
My own take is slightly different. I don't want US$100b, but cognitive overload is not the problem. I am fairly sure that billionaires are not overwhelmed by the prospect of lunch. And, while projects are important, they are also scalable. If you enjoyed collecting key rings, switch to collecting fine art: even with US$100b to spend, the project of establishing the world's greatest private museum is likely to have legs.
The real problem is that being a multibillionaire would change your relationship with every other human being. Keynes knew that we often desire to feel a little "superior to our fellows" but, when the superiority becomes extreme, you become a target for kidnappers, terrorists, fraudsters and gold-diggers of every kind. Few of your relationships are likely to survive. Can you really trust those that do?
Bain and Bongiorno, the researchers who found that people would rather have US$10m than US$100b, argue that their result offers hope for sustainable development, because it suggests that people don't have unlimited material wants. Perhaps.
I draw a different conclusion. The richest people in past societies had material wants which they could not satisfy, but which we can: air conditioning, air travel and antibiotics. Our descendants may well have material wants which we rarely even think of because they are beyond our grasp, from teleportation to eternal youth.
The best hope for sustainable development is not that we will stop desiring things we currently cannot have. It is that most of what we value is not a matter of money. My friend, with his fantasies of earning £100 a day, enjoyed drinking beer and listening to music with the rest of us. It was a convivial lifestyle. In contrast, life with $100b must be so terribly lonely.
• Tim Harford's new book is How to Make the World Add Up
Written by: Tim Harford
© Financial Times
