An Experimental Approach to Relative Income and Happiness

Last registered on December 19, 2023
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Pre-Trial

Trial Information

General Information

Title
An Experimental Approach to Relative Income and Happiness
RCT ID
AEARCTR-0003272
Initial registration date
August 29, 2018

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
August 30, 2018, 2:59 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
December 19, 2023, 4:47 PM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
United States of America
Region

Primary Investigator

Name
Homa Zarghamee
Affiliation
Barnard College
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
John Ifcher
PI Affiliation
Santa Clara University
Contact Investigator
PI Name
Daniel Houser
PI Affiliation
George Mason University
Contact Investigator
PI Name
Lina Diaz
PI Affiliation
George Mason University
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2014-05-23
End date
2017-12-12
Keywords
Other, Welfare
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
John Stuart Mill claimed that “men do not desire merely to be rich, but richer than other men.” Are people made happy by being richer than others? Or are people made happy by favorable comparisons to others more generally, and being richer is merely a proxy for this ineffable relativity? We conduct an online experiment absent choice in which we measure subjective well-being (SWB) before and after an exogenous shock that reveals to subjects how many experimental points they and another subject receive, and whether or not points are worth money. We find that subjects are made significantly happier when they receive monetized rather than non-monetized points, suggesting money is valued more than the points it represents. In contrast, subjects are made equally unhappy when they receive fewer monetized points as when they receive fewer non-monetized points than others, suggesting relative money is not valued more than the relative points it represents. We find no evidence that subjects are made happier by being “richer” than others (i.e., by receiving more points—either monetized or non-monetized—than others). Subgroup analyses reveal women are made unhappier (than men) by being “richer” and “poorer” than others, and conservatives are made unhappier (than progressives) by being “poorer” than others. Our experimental-SWB approach is easy to administer and may complement choice-based tasks in future experiments to better estimate preference parameters.
External Link(s)

Registration Citation

Citation
Diaz, Lina et al. 2023. "An Experimental Approach to Relative Income and Happiness." AEA RCT Registry. December 19. https://doi.org/10.1257/rct.3272-2.0
Former Citation
Diaz, Lina et al. 2023. "An Experimental Approach to Relative Income and Happiness." AEA RCT Registry. December 19. https://www.socialscienceregistry.org/trials/3272/history/205772
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
It was revealed to participants how much money they and another participant would be given for participating in the experiment. These amounts varied by treatment. Subjective well-being was measured before and after the revelation.
Intervention (Hidden)
Intervention Start Date
2017-12-11
Intervention End Date
2017-12-12

Primary Outcomes

Primary Outcomes (end points)
Subjective well-being: whether it is impacted by the revelation of own and others' payments.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The main experiment is as follows (with Discovery and Pilot studies designed similarly):
In the instructions each subject was informed that:
● She would be randomly assigned to a two-person group.
● The other subject in the group (hereafter Participant X) could be any other subject in the study.
● She and Participant X would be allotted 2 or 10 experimental points each, creating four possible allocations of points:
○ She receives 2 points, and Participant X receives 2 points.
○ She receives 2 points, and Participant X receives 10 points.
○ She receives 10 points, and Participant X receives 2 points.
○ She receives 10 points, and Participant X receives 10 points.

Subjects were randomized such that half were informed that for each point they received, they and Participant X would receive $1, and half were informed that they and Participant X would receive a flat payment of $6, no matter how many points they received. This yields 8 distinct cells from a 4 (allocations of 2 or 10 pts to the subject and 2 or 10 pts to Participant X) X 2 (points-worth-dollars versus not) design
Experimental Design Details
Randomization Method
Computerized randomization.
Randomization Unit
Individual randomization only
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
1000
Sample size: planned number of observations
1000
Sample size (or number of clusters) by treatment arms
125 per cell
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

Documents

Document Name
Qualtrics survey
Document Type
survey_instrument
Document Description
Full experiment as viewed by experimental participants on qualtrics.
File
Qualtrics survey

MD5: 25afedc48647c6ded17ec68e97af41cd

SHA1: 705e8b9e211d00aa5c62de082dd71f2ff0b09867

Uploaded At: December 19, 2023

IRB

Institutional Review Boards (IRBs)

IRB Name
Barnard College
IRB Approval Date
2014-02-24
IRB Approval Number
1314-1110-022.
IRB Name
Santa Clara University
IRB Approval Date
2017-11-13
IRB Approval Number
14-01-467
IRB Name
George Mason University
IRB Approval Date
2014-02-06
IRB Approval Number
545751-1
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

There is information in this trial unavailable to the public. Use the button below to request access.

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
December 12, 2017, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
December 12, 2017, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
1180 in main experiment, 399 in discovery study (12 cells) and 199 in pilot (8 cells)
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
Of 1180 individuals who clicked the Qualtrics link, 128 did not complete the survey, and another 56 completed the survey but either entered an incorrect survey-completion code or none at all. So the Final Sample Size was 996.
Final Sample Size (or Number of Clusters) by Treatment Arms
471 were in the pts-treatment and 525 in the pts$-treatment. 132 subjects (69 in the pts-treatment and 63 in the pts$-treatment) completed at least one of the screening items incorrectly and were dropped from the analysis. The final sample size in the LL pts$ treatment was 99, in LL pts was 103, in LH pts$ was 103, in LH pts was 109, in HL pts$ was 123, in HL pts was 89, in HH pts$ was 133, in HH pts was 101.
Data Publication

Data Publication

Is public data available?
No

There is information in this trial unavailable to the public. Use the button below to request access.

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Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
John Stuart Mill claimed that “men do not desire merely to be rich, but richer than other men.” Are people made happy by being richer than others? Or are people made happy by favorable comparisons to others more generally, and being richer is merely a proxy for this ineffable relativity? We conduct an online experiment absent choice in which we measure subjective well-being (SWB) before and after an exogenous shock that reveals to subjects how many experimental points they and another subject receive, and whether or not points are worth money. We find that subjects are made significantly happier when they receive monetized rather than non-monetized points, suggesting money is valued more than the points it represents. In contrast, subjects are made equally unhappy when they receive fewer monetized points as when they receive fewer non-monetized points than others, suggesting relative money is not valued more than the relative points it represents. We find no evidence that subjects are made happier by being “richer” than others (i.e., by receiving more points—either monetized or non-monetized—than others). Subgroup analyses reveal women are made unhappier (than men) by being “richer” and “poorer” than others, and conservatives are made unhappier (than progressives) by being “poorer” than others. Our experimental-SWB approach is easy to administer and may complement choice-based tasks in future experiments to better estimate preference parameters.
Citation
Ifcher, J., Zarghamee, H., Houser, D. et al. The relative income effect: an experiment. Experimental Economics 23, 1205–1234 (2020). https://doi.org/10.1007/s10683-020-09648-w
URL
https://doi.org/10.1007/s10683-020-09648-w

Reports & Other Materials