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Friday, 24 June 2011

Freedom More Important to Well-Being Than Money

by Laura Rowley

When Bill Douglass and his wife found out they were expecting their first child in 2009, he did something counterintuitive: He quit his job. Douglass left a secure position in corporate communications in New York City to launch his own firm in Stamford, Connecticut.

"I knew I wanted to spend a lot of time with our daughter, especially in her formative years," says Douglass, whose own father traveled frequently on business. "Knowing she was coming was an inspiration to strike out on my own and work from home. My first year in business I only had one client, but because we had been good savers, that gave me the freedom to be able to start my firm."

A new study suggests that from a happiness perspective, Douglass was smart to choose autonomy over money. Psychologists Ronald Fischer and Diana Boer of Victoria University of Wellington in New Zealand found that on a national level, individualism and autonomy are more important to well-being than money. The study appears in the Journal of Personality and Social Psychology.

"Countries scoring high in autonomy had less stress, less burnout, less mental health problems and so on," says Fischer. "We were surprised by the very strong, consistent effect of autonomy. There's lots of evidence that wealth would be a predictor of well-being in large population samples, so we were surprised to find that once we account for national indicators of autonomy and individualism, money isn't as important anymore."

In other words, wealth may influence well-being only through its effect on freedom: More money gives you more control over your life and your choices, which makes you happier.

Fischer and Boer did a meta-analysis, statistically combining the results of multiple surveys done in 63 countries across more than 420,000 people over four decades. They created a well-being index for each country by combining three different surveys measuring psychological health, anxiety and burnout/stress.

"Those three instruments pick up really well how people are doing in their daily lives, and they have been used a lot in different studies around the world, so we had good database for analysis," Fischer says. The researchers then correlated their well-being index with gross national income per capita and autonomy.

To measure autonomy, the researchers used several surveys, including political scientist Ron Ingelhart's index of values, which asks people to choose among important goals, ranging from economic and physical security to personal values such as self-expression. The researchers also used social psychologist Geert Hofstede's individualism index, which measures whether a culture favors individualism (everyone looks out for himself) or collectivism (strong integration into a particular social group).

Finally, they incorporated an index by social psychologist Shalom Schwartz that determines if a society favors autonomy (broadmindedness, pursuit of ideas, curiosity, creative work, pleasure and enjoyment of life) or embeddedness (respect for social order, obedience and tradition).

Kennon Sheldon, a psychologist at the University of Missouri, found similar results among individuals in a study he conducted a decade ago. It asked people to describe their most satisfying experience in the past week, month and year. "It was never 'I got a bunch of money,'" he says. "It was 'doing something meaningful that I chose to do and doing well at it.' So in that case, autonomy outperformed making money or enjoying luxuries.

"Autonomy is really about self-organization and self-regulation, and kind of goes to the heart of what a living system is," Sheldon continues. "Are you being buffeted by what's surrounding you or do you have internal guidance? To the extent you have the latter, you would be doing interesting things, performing without pressure or resentment — and you're going to grow as a person to a greater extent."

That's what California publicist Aimee Cebulski has found. Fourteen years ago she left her full-time job to take a project on a six-month contract, and has freelanced ever since. Combining frugality with the ability to structure her time, Cebulski has traveled to 40 countries over the last decade.

"I'm in a unique position — I'm not married, I don't have children, so I have less overhead and financial responsibility and more ability to choose my day-to-day life," she says. "My boyfriend works for himself as well, and the freedom we enjoy is worth far more than money. You can never get the time back." She'll occasionally start work at 5 a.m. so she can spend the afternoon with her nieces at a local attraction like Legoland.

Cebulski, 39, is now working on a project to travel to 40 countries and interview and photograph 40 different women who are on the verge of turning 40 years old. "I want to take a snapshot in time and see how different 40 can be around the world," she says.

The study also found that too much money and individualism can have a negative impact. When countries have an abundance of wealth and autonomy simultaneously, they don't score as high as expected on well-being.

Case in point: the U.S. We're one of the richest countries, but Americans were found to have a higher rate of mental health problems. Excessive individualism may reduce well-being through weak social ties, increased negative social attitudes and materialism, Fischer notes. Too much choice tends to produce stress for individuals, but these are findings that need further research, he says.

Although the study looks at well-being on the national level, individuals can apply its lessons. "Based on the findings, people should go for balance," says Fischer. "It is important for people to earn enough money to satisfy daily needs, but then focus on things that make them happy in their lives. This is autonomy: looking for ways to use their creativity; being curious about stuff and broadening their minds; and finding activities that give them pleasure. It's not important to get a job that gives you another $5,000 a year if that means you can't actually enjoy your loved ones or some interesting hobby you could pursue."

Douglass, whose daughter turns one on July 4, agrees. "To me money equates with freedom," he says. "It's just absolutely priceless to have the freedom to go downstairs and play with my daughter for a while and not be pinned down to an office. I wouldn't trade this last year for anything."

Laura is author of the book "Money & Happiness" and blog of the same name. Read more about her here.

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