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Luke Freeman

June 2021 Newsletter

Welcome to our June Newsletter which covers Giving What We Can news and updates, upcoming online events, the latest from the effective altruism community, and news and updates about relevant cause areas.

 with a series of industry and cause area talks, as well as bespoke video articles covering 

" Julian Hazell and Michael Plant reviewed new data on income and happiness.

10 reasons why we should donate to the most effective charities.

Andrew Leeke and Surbhi Bharadwaj released two new 

Do effective animal advocates only care about farmed animals?

Does aid make low-income countries dependent on handouts?

 and whether we should be private or public about giving to charity.

 how The Good Place helped him to take The Pledge, and invited Michael to join him in his commitment to effectively helping others.

 shared why they took The Pledge and made the case for people to join them. 

 and gave three workplace talks on effective giving.

 inspired more than 10 students to make a giving pledge --- 

Come along and meet other people who are committed to effectively using their resources to improve the world:

: Ask anything, discuss donations, meet effective givers
July 15: 10:00 UTC

If you have any questions or want to discuss your donation decisions with other members or our team, we recommend registering for an Open Forum event. 

Member J.S. Winchell started a discussion on whether 

digital marketing is under-utilized in effective altruism

How to do good better: The case for effective altruism

" article was published by the Australian Broadcasting Corporation.

Lotte de Lint shares why effective altruism would benefit from 

more engagement with creative disciplines

The EA Giving Tuesday donation matching initiative has released their 

Women and Non-Binary Altruism Mentorship (WANBAM) is accepting 

 of their website for donors in The Netherlands.

 launched with the aim of promoting effective giving through rabbis and the Reform movement. Please 

 if you can help in their effort to spread effective giving.

 for those wanting a structured approach to planning a high-impact career.

latest updates from 18 effective altruism organisations

announced the recipients of over $1 million

 in the latest round of their Movement Grants.

When will we get the Impossible Burger of cheese?

European Parliament overwhelmingly backs ban on caged animal farming

Facial recognition tech is coming for pigs. Can it tell if they're suffering?

With support from NOAA, alt seafood could help sustainably meet the growing demand for seafood

More than 40 carbon capture projects have been announced across 13 different European countries

Bipartisan U.S. House of Representatives vote reinstates methane standards

How a lead-removal charity startup (co-founded by GWWC member Lucia Coulter) changed a nation's policy in under three months

Another victory in humanity's war against mosquitoes

Guaranteed income is graduating from charity to public policy

Pakistan is leading the way in establishing domestic financing for deworming programs

Holden Karnofsky from Open Philanthropy has published a 

 for people seeking careers focused on long-term impact.

EA-affiliated researchers published a report, 

, to help the UK avoid disaster when the next extreme risk rolls around.

2018--2019 Long Term Future Fund Grantees: How did they do?

Humanities Research Ideas for Longtermists

A post shared by Giving What We Can (@giving_what_we_can)

 with Giving What We Can and effective altruism.

Discuss effective giving and effective altruism on the 

Do you have questions about the pledge, Giving What We Can, or effective altruism in general? Check out our 

Julian Hazell

Michael Plant

Can money buy happiness? A study by two Nobel Laureates suggests it can – but only up to a point. 

Can money buy happiness? A review of new data

Everyone knows the adage "money can't buy happiness," although few of us seem to believe it. It is clear that being wealthy does not guarantee happiness; there are many who are tremendously wealthy, yet entirely unhappy. Of course, anecdotal evidence is sometimes misleading, so we have 

 on what data suggests about the relationship between money and happiness.

The best-known theory on this topic is that money can buy happiness, but only up to a point. This comes from a study by two Nobel Laureates, 

, which found that emotional wellbeing rises with income. However, it rises logarithmically. That is, as an individual's income increases, their wellbeing increases at a slower and slower rate. And after income surpasses about $75,000 per year, Kahneman and Deaton's data suggests, wellbeing stops increasing altogether.

 challenges this finding: the paper, entitled "Experienced well-being rises with income, even above $75,000 per year," gives us reason to think that we should take a closer look at the link between money and happiness, with an important caveat. As we argue in this piece, a more accurate title for this paper might be: "Money barely increases happiness above $75,000 per year — unless you really value money, and even then not by much."

In 2010, Kahneman and Deaton's study examined the link between income, emotional wellbeing, and overall life evaluation. Kahneman and Deaton's study relied on a survey of 450,000 American respondents that contained questions about emotional wellbeing, life satisfaction, and reported family income. After examining the data, the pair famously concluded that happiness remains basically unchanged once household income exceeds $75,000, though overall life evaluation keeps improving. The key conclusion is that incomes over $75,000 buy life satisfaction, but not happiness.

Conversely, Killingsworth’s recent study takes advantage of technology to revisit the relationship between income and happiness. The new study used a smartphone app to periodically ask a large sample of people how they felt throughout the day on a continuous scale from “very bad” to “very good.” By contrast, the 2010 study asked people to recall how they felt in the past. As Killingsworth points out, the 2010 study’s methodology is “vulnerable to memory errors and biases in judgement.”

 Contrary to Kahneman and Deaton’s study, Killingsworth found that happiness and life satisfaction continue to increase with household income, even after income surpasses $75,000.

Does that mean that money makes a big difference in happiness and that you should go work at Goldman Sachs? Not so fast. Note that Killingsworth’s graph uses a logarithmic x-axis for income (echoing Kahneman and Deaton 2010) and the y-axis uses z-scores, a measure of standard deviation that won’t have much intuitive meaning to anyone unfamiliar with statistics. Here’s the data for experienced wellbeing, but plotted with different axes.

A doubling of income is associated with about a 1-point increase on a 0–100 scale, which seems (to our eyes) surprisingly small.

If we change the y-axis to display a linear relationship, this tells a different story. In fact, we see a plateauing of the relationship between income and experienced wellbeing, just as found in Kahneman and Deaton (2010), but at a later point — about $200,000 per year.

Perhaps the most interesting result, which was mentioned in the body of the paper, was that the association between money and happiness was strongly moderated by individuals' answers to "How important is money to you?" This raises an interesting question about causality: do people value money because they know it makes them happier, or does it make them happier because they value it? Either way, we are left with a satisfyingly nuanced twist. While money may matter less than we expect, individuals nevertheless seem to know how much it matters for themselves compared to others.

While it is true this paper finds money is correlated with happiness for incomes past $75,000, we should be careful not to overinterpret this evidence. (Obligatory note: 

) The association is quite small — perhaps underwhelmingly small — and a large part of the explanation is driven by whether people believe (or have learned) that money matters to them. So, it might be better to say: money can buy happiness, but you might be surprised at how little it buys.

If money doesn't make you happy then you probably aren't spending it right

The previous point raises the question: doesn't it matter how people spend their money? Surely there are better and worse ways to spend it. A great paper on this topic is 

. In it, the authors make the following suggestions:

Buy more experiences and fewer material goods.

Use money to benefit others rather than yourself.

Buy many small pleasures rather than fewer large ones.

Eschew extended warranties and other forms of overpriced insurance.

Consider how peripheral features of your purchases may affect your day-to-day life.

Pay close attention to the happiness of others.

As you might expect, we want to focus on the happiness from helping others. There is some 

 that prosocial spending (i.e., spending money to benefit others) improves the spender's happiness. In one experiment, participants were given money and then randomly told to spend it on themselves or others. As it turns out, those who spent it on others reported higher levels of happiness at the end of the study.

So one reason to give is that it will probably make you happier than the other ways you could spend your money, especially if you're already earning a lot of money.

The other (probably bigger) reason is that it can substantially increase the happiness of others too.

Killingsworth's study suggests that doubling Jane's income from $500 to $1,000 increases Jane's happiness by the same amount as doubling John's income from $100,000 to $200,000 increases John's happiness. However, that $100,000 increase for John could instead be used to increase the happiness of 200 others like Jane by the same amount. That's quite a bargain!

Killingsworth's study has advanced our state of knowledge on the link between money and happiness through the use of a clever research design. The new data suggests that increases in happiness don't stop after an individual reaches an income of $75,000. Instead, the increases continue, and perhaps plateau, at a later point. However, this new insight doesn't significantly change the conclusions drawn after Kahneman and Deaton's 2010 study. It seems that chasing ever-increasing amounts of money is an ineffective way to find happiness for ourselves. On the other hand, giving to 

 is a great way to make others feel happier. Those of us who live in high-income countries have an exciting opportunity to significantly improve the lives of others by 

 over the course of our careers. Even better, we might find ourselves much happier while doing so.

Elizabeth W. Dunn, Daniel T. Gilbert, and Timothy D. Wilson, "

High income improves evaluation of life but not emotional well-being

Experienced well-being rises with income, even above $75,000 per year

Giving without sacrifice? The relationship between income, happiness, and giving

Research in conversation: How to live a happy life

Everything you need to know about whether money makes you happy

Everyone knows the adage “money can’t buy happiness,” although few of us seem to believe it.

The best-known theory on this topic is that money actually can buy happiness, but only up to a point. This comes from a study by two Nobel Laureates, Daniel Kahneman and Angus Deaton (2010), which found that emotional wellbeing rises with income. However, it rises logarithmically. That is, as an individual’s income increases, their wellbeing increases at a slower and slower rate. And after income surpasses about $75,000 per year, Kahneman and Deaton’s data suggests, wellbeing stops increasing altogether. However, new research from Matthew Killingsworth challenges this finding.

Why should we donate to the most effective charities?

Imagine you're buying canned tomatoes. Side by side are two different brands. You inspect the labels and notice that they are virtually identical — the only real difference between them is the cost. One brand costs $2 and the other costs a whopping $20.

I'm not a mind reader, but I'm pretty confident that you'd buy the better value brand, saving your extra $18 for later.

If, the following week, the store had a similar third brand on sale for 20 cents, you'd probably stock up, fill your bag, and still walk out with spare change.

While it's unlikely that store prices would vary so much for similar items, research suggests that these kinds of 

astonishing differences in cost effectiveness

 exist when it comes to charitable giving. How much 'good' your money can buy varies significantly from charity to charity.

In this article, we cover 10 reasons why it is important to prioritise cost effectiveness when donating to charity.

In the year 2000, a nonprofit organisation named PlayPumps won the World Bank's 

. Their signature product was a small merry-go-round designed to replace hand pumps with water pumps powered by kids having fun.

PlayPumps were praised by the likes of Bill Clinton, Jay-Z, and First Lady Laura Bush. By 2009, there were 1,800 PlayPumps installed across South Africa, Mozambique, Swaziland, and Zambia.

PlayPumps raised a tonne of cash and were considered a success by the media. There was just one problem: PlayPumps didn't really work. In fact, the pumps were doing more harm than good.

Most merry-go-rounds build up momentum and then spin freely — this is why they are fun for kids. But if they're being used to pump water, they require constant force. Applying such force would be exhausting for any adult, let alone a child.

PlayPumps turned out to be a dangerous, ineffective, and expensive alternative to a traditional hand pump — inferior in almost every possible way. They were a chore rather than a source of enjoyment for children. Kids didn't want to play with them, so the women of the local village ended up pushing the merry-go-round themselves, which was tiring and not an activity the women signed up for.

This cautionary tale of charity ineffectiveness highlights why assessing the effectiveness of any charitable initiative is essential, even if only to make sure that we are not causing any harm to those we intended to help.

Each of us only has so much time, money, and energy. Even very affluent people have a finite amount of resources that they can spend; all of us are limited by the number of hours in the day, and days in a human lifespan; and there are only so many things we can focus on.

Choosing to spend resources on one thing is an implicit choice not to spend it on other things. In economics, this is called an 

: the loss of the benefit that could have been enjoyed if the best alternative choice was chosen instead.

Just as we cannot wind back the clock to relive our day, we cannot not spend the same dollar twice.

This is important because the scale of the things we care about — the things we desire to change — will typically be much larger than the scale of what we actually can change with our limited resources. If we use our resources effectively, we can have a much bigger impact on the things that we care about.

3. Charity effectiveness varies significantly

While most people assume that the best charities are only slightly more effective than average, experts estimate that the best charities are often 100 times more effective

 page, there is a list of concrete examples of how effectiveness varies between charities. For instance, providing deworming treatment is roughly 100 times more effective than merit scholarships are for improving education.

The difference in effectiveness can be even bigger when comparing charities working in a wide variety of causes.

These huge differences in effectiveness provide us with an opportunity to do much more good with our charitable dollars if we 

, rather than simply choosing the charities that we are familiar with, or the ones that are most convenient.

. Its ultimate goal is to relieve suffering, increase flourishing, and improve the lives of its beneficiaries.

However, many organisations that accept donations are closer to commercial services than they are to a pure charity. Rather than donating purely to help others, we donate to these organisations as a way of paying for services, expressing our opinions, or investing in our interests. These might include your local school, hospital, church, or art gallery. While it is reasonable to pay to support things you are involved with and benefit from, it's important to distinguish these activities from true charity.

Blog

June 2021 Newsletter

Can money buy happiness? A review of new data

Why should we donate to the most effective charities?

Does aid make low-income countries dependent on handouts?

Do effective animal advocates only care about farmed animals?

Donating anonymously: Should we be private or public about giving to charity?

How much money should we donate to charity?

May 2021 Newsletter

I Dedicated My Birthday to the Against Malaria Foundation

Shouldn't we address human suffering before working to reduce animal suffering?