IMPACT OF MONETARY INCOME ON INDIVIDUAL WELL-BEING

Introduction

A modern individual’s well-being depends on several factors, such as life situations, recently watched movies, world perception, relationships with others, and most of all – money. In modern society, money is a powerful tool, an indicator of welfare and status. Virtually, all people work for money which can satisfy their basic needs (roof, nourishment, sanitary, etc.). The impact of money on human well-being is an interesting topic to shed light on today because we all as the same species may get to know most of all’s common desires and roots of such wishes. Globally speaking, approximately 1 billion people worldwide live on less than one dollar a day (Akhter, 2013). In Kazakhstan, 90% of employed people in megapolises, such as Almaty and Astana, cannot be considered as middle class. The inequality between ranges of lower to lower-middle class and middle to upper class remains 94% against 6% respectively (Maulenkulov, 2023). Such statistics may give a concern about the well-being of citizens because most of them live from salary to salary and cannot afford excess spendings.

Key terms:

• Well-being: general health and happiness.
• Monetary income: the money that a person earns.
• Inequality: the unfair difference between groups of people in society.

Context

Rise in happiness from increased monetary income can take a stem from competition for status in society. Because of interdependence of preferences, individual happiness and satisfaction will depend on what one achieves in comparison with others. Money, as an indicator of wealth, also serves as fangs and talons for contemporary individuals in a fight for upper position. Ones with a lot of money dominate most social layers of people in various aspects, including well-being in most cases too. Competition is one of the primal instincts of human beings (van der Linden, 2015), and being on top of the social pyramid would boost the happiness of an individual. To prove this point, consider an ideal society where everyone has an equal income, equal material possessions. In such a community, money would not provide a great significance, in comparison with our real community, because the wealth gap between individuals would be negligible. If everybody would drive a Rolls Royce, one would feel unhappy with a cheaper car (Ferrer-i-Carbonell, 2002). Additionally, possessing high finances and income provide uncountable perks for an individual. Therefore, more money equals high status which means dominance in society and increased happiness.

Country’s GDP per capita is one of the factors which must be considered during observation of the money/happiness link. Analysis of fifty-two countries showed that the income/happiness correlation was emphasized more in countries with high income inequality than in countries with lower income inequality. The income/happiness correlation tends to get higher when both GDP per capita and income inequality are high, whereas it tends to get lower when GDP per capita and/or income inequality are low. These findings suggest the importance of accounting for income inequality as well as national wealth in understanding the role of money in happiness (Oishi et al., 2022).  For example, East Germans experienced a substantial increase in real income between 1991 and 2002 and reported a considerable rise in their life satisfaction over the same period (Clark et al., 2011). This may lead to inferring that in countries with high GDP per capita, competition for the top place in society is also high, and winning such a stiff competition can give a person full feeling of satisfaction and happiness. Meanwhile, in countries with low GDP per capita, such competition may not seem as challenging for slightly wealthier people.

  Despite there is a clear bond between income and well-being of an individual, threshold for such correlation is said to exist. Most people need money to meet their basic requirements for survival in today’s world. Daniel Kahneman’s study suggests that threshold for correlation is equal to money which is enough to make a person afford first-need services and times. Until $60.000 annually, the correlation remained in linear graph, and after $90.000 correlation showed flattening pattern. However, Matthew Killingsworth’s research revealed that correlation continues even after $240.000. After engaging in collaboration for further research purposes, both researchers agreed that the measure done by Matthew K. was more accurate (Killingsworth et al. 2022). Generally speaking, the happiness of an individual continues to rise even after meeting basic needs, and it seems to have no specific threshold.

Having increased stress and anxiety may also relate to high income. Sacrificing mental or physical state for high wage is common, because no easy work is paid well. People with high-salary jobs tend to be extremely focused and in most cases be on edge, due to exhausting conditions. For example, 47 percent of people making $35.000-to-$50.000 a year reported that they had experienced stress at work. In contrast, 68 percent of people making more than $200,000+ annually said they were stressed at work (Petrone, 2018). So, high income does not always mean good mental state.0

Aims

There is an assumption that finances somehow correlate with human health. To prove or disprove this notion, the various drivers of social economy were taken to try to establish a link between them and human psychology. The main purpose of this research is to investigate the influence of money, income, and other factors related to finances and economics on the mental status of a person.

Research questions:

• How does an age of individual affect the perception of financial wealth?
• How do the consequences of money shortage threat individuals and a whole society?
• Does someone who is struggling from depression caused by financial factors need any assistance in solving their problem?
• Will humanity ever get rid of the influence of finance on well-being?

Hypothesis of research states the most common thing: excluding all other non-related factors, the more money a person has, the happier they appear to be. The outcome of the research will prove this hypothesis but not in the intended way.

Methodology

Information sources provided by Ferrer-i-Carbonell A., Oishi S., Clark A., and Petrone P., used in the context section, support arguments by giving evidences related to them. However, information from additional research methods still must be included to perpetuate the hypothesis and answer the questions that were left unanswered.  

As a quantitative method, survey method will mostly rely on statistical and countable information, such as number of participants who chose specific answer. The process of collecting data using this method consists of three parts: preparing the main questions, sending the survey and waiting for enough respondents to answer, and evaluating the conclusion according to collected data. This method is a great way to gather information from a great number of people in a short time due to the simplicity of the questionnaire. However, this method possesses some drawbacks. As an example, not all respondents may answer properly to all questions. This means that it will be hard to achieve accurate and trustworthy answers.

The second method — interview, intends on gathering information from one or more (up to 4-5) persons. The first and last parts of this method's process are similar to a survey, however the second part implies collecting answers from one particular person who must be an expert in a specific topic, related to the main theme. The advantage of this method lies in the quality of the answers (as it refers to a qualitative method). To elaborate on, an expert in specific field might give more reliable and trustable answers, reinforcing his answers with research or any other form of evidence. An expert may also provide answers to additional questions which may appear in the middle of the discussion. Speaking about disadvantages, this method is done in comparatively long period of time, as preparing questions, preparing for the interview, finding the right person, and interviewing him correctly takes a ton of patience and time.

Results

Genders of 50 respondents have ratio of 52% Female and 48% Male. The ages of respondents can be described as 42% of 16-21 years, 16% of 22-27 years, and 42% of 28 and more years. Most respondents are either teenagers or adults, while the minority is the age group of young adults (App2). Respondents are 58% of Students and 42% of Workers. While the option “Others” was included to identify number of jobless respondents, not a single respondent answered that he or she does not have an occupation.

Research question 1: How does an age of individual affect the perception of financial wealth?

Respondents have rated the correlation between an income and well-being in range of 1-10 with next results: 6% for 1-4 points, 24% for 5-7 points, and 70% for 8-10 points (App4). 42% of respondents would like to have a job that could satisfy them; 12% would prefer the middle of contentment and wage, and 46% have answered in favor of the high wage (App5). Respondents have reported the importance of income in modern society by the following results: 2% for 1-4 points, 8% for 5-7 points, and 90% for 8-10 points (App7). 46% of respondents think that 30-60 years old people manage their finances better than younger people and only 8% believe that it is not true, however another 46% reported that it depends on the individual, not on age (App9).

Research question 2: How do the consequences of money shortage threat individuals and a whole society?

100% of respondents have answered that any change in income in daily life, in some extent, can affect the mental state of an individual (App6). When respondents were asked to anticipate possible consequences of money shortage, next results were received: Depression – 28 (56%), anxiety – 29 (58%), stress – 35 (70%), heart diseases – 13 (26%), irritability – 28 (56%), insomnia – 21 (42%) (App 8).

Research question 3: Does someone who is struggling from depression caused by financial factors need any assistance in solving their problem?

 An expert answers that facing this issue can be described as “stressful and depressing” for most people because it can reduce self-esteem, sense of worth, and hope, implying the necessity to solve this problem as soon as possible. An expert also provided some pieces of advice, such as showing mental support to a person and assisting with practical experience of properly managing finances to decrease non-significant spendings.

Research question 4: Will humanity ever get rid of the influence of finance on well-being?

By mentioning the potential development of artificial intelligence and automatization of most human-done processes, an expert anticipates that eliminating money superiority is one of the possible outcomes that could be achieved in the far future. An expert also states that such practice would contribute to the flourishing of moral values in society and provide opportunities for chasing desired goals.

Discussion

According to the context section, the connection between income and happiness seems to be strong and plays a vital role in the hierarchy of our society. M. Killingsworth's research shows that an individual gets happier even if he/she possesses enough money to cover their roof, food, and other basic needs. It is not a surprising result, as excess money could be used for other luxurious spendings, such as buying a dream car, having a trip abroad, purchasing a mansion, etc. That is why his research have revealed that happiness tends to increase even after $240.000/year income.

Dr. Matt Killingsworth studies the nature and causes of human happiness. He is a Senior Fellow at the Wharton School at the University of Pennsylvania and the founder and director of trackyourhappiness.org, a large-scale research project that uses smartphones to collect real-time happiness data from people around the world. As he holds Ph.D. in Psychology from Harvard University, he certainly has knowledge in this field.

An argument itself, despite having the visible structure, lacks consistency in thesis and position. Thesis does not fully introduce the whole argument, but only a part of it. In other words, instead of giving a short abstract to the argument, thesis in this case serves more as a hook sentence because at the end of the argument completely new information is added.

The Proceedings of the National Academy of Sciences (PNAS), a peer reviewed journal of the National Academy of Sciences (NAS), is an authoritative source of high-impact, original research that broadly spans the biological, physical, and social sciences.

The results of this argument's research can be considered reliable because D. Kahneman was conducting his own independent study on this topic simultaneously with M. Killingsworth, and in the final analysis they have compared their findings, assessing each other.

During the research process, I became more aware about the role of money in society and the influence it has on various aspects of our lives, including well-being. It also taught me that financial status is significant for an individual to survive in the contemporary world and obtain social acknowledgement.

There were several problems during the research process. One of them is outdated information. Most of past studies were old enough to be considered unsuitable for examples. This obstacle could be caused by the fact that our society tends not to change in a relatively short period of time when it comes to topics related to finances. Therefore, researches related to this topic are scarce. The next problem is conducting the survey. A lot of people on the internet were hesitant to answer or did not want to spend their time, thinking that link to a survey was malicious or could threaten their confidentiality.

One of the major weaknesses is improper survey. Survey questions were not divided equally to cover both research questions; hence the second research question was not answered fully.

Conclusion

The purpose of the current study was to determine the influence of money, income, and other factors related to finances and economics on the mental status of a person. According to the data described in primary and secondary research, money welfare is identified as one of the desired aims of an individual in today's world. Additional data from the survey has shown that the role of money in today's world is indisputably high. From the context, it could be explained by a social hierarchy in the modern world, where money, respectively to its role, has an untold power of increasing social status and self-importance.

Despite the wage, enough to meet the needs of individuals, no threshold was observed. The fact of earning an uncountable amount of money every year itself made people happy.

Money seems to influence both young and old minds similarly: whether it is cash, given for an ice-cream or lottery, the consequent action is obtaining something that could increase dopamine levels of buyer. Teenagers, middle-aged people, and old people share the same opinions for topics related to budget.

Possessing a great number of finances can contribute to the increase in self-esteem and confidence also.

Facing financial shortage can cause various diseases, including stress. It could lead to the start of criminal activities, intended to acquire material possessions. To help someone in this situation, it is recommended to show mental support and assist in money management.

An ideal society in the far future would not have dependency of happiness on financial situation. Possible advancements in technology may free society from valuing money, by creating world with excess resources.