The Guardian’s bogus claim about money, long commutes, and life satisfaction

http://www.elezea.com/2013/11/money-satisfaction/

by pascal07 • 13 years ago

37 26 13 years ago

mhaymo• 13 years ago

Earning more money doesn’t increase satisfaction with life. It just compensates for the lack of satisfaction (“Utility” in the formula) caused by longer commutes.

I don't understand this line. How can money compensate for a loss of utility without increasing utility? An earlier quote from the paper asks "how much additional income would a commuter have to earn in order to be as well off as somebody who does not commute?", and the phrase "as well off" implies to me that the person is as satisfied.

Apart from the "40% of salary" detail, it seems to me that The Guardian got it right.

pascal07• 13 years ago

The "as well off" phrase refers to "being equally compensated". So the absolute utility "number" remains the same. In order for that to happen, a decrease in the contribution that commute has on utility, needs to be compensated for by an increase in the contribution that one of the other factors (salary or rent) has.

jeffehobbs• 13 years ago

Agreed. As I read this piece, I was struggling to find the part The Guardian got wrong. If anything this is an argument over semantics.

throwaway0094• 13 years ago

Well, not everyone earns the average income (obviously). So the percentage is wrong for everyone.

jasonlotito• 13 years ago

If you are dissatisfied with a commute, earning more money doesn't necessarily increase your satisfaction with having the commute. You still dislike the commute, and you are dissatisfied with is, you are just willing to accept it as the price you pay for more money and lower rent.

If anything this is an argument over semantics.

This is also explained in the article.

"A person w/ a 1hr commute has to earn 40% more money to be as satisfied with life as someone who walks to the office"

That's a take away from someone reading the original article. This is obviously not true, even disregarding the 40% part, and not what the original article even suggested, but it's being interpreted that way.

While I strongly dislike pedants, word choice is important, and can change the meaning even if technically correct.

VLM• 13 years ago

"How can money compensate for a loss of utility without increasing utility?"

Direct, measurable cost of the commute?

Distance of commute correlates positively with time of commute. Not perfectly but close enough. My current 30 minute commute is twice as long (and far) as my previous employer, therefore I put twice the wear and tear on my car. I'm driving 20 more miles per day than I used to, at 50 cents/mile I need to earn $10 more per day just to break even, or about a buck an hour more. For a "computer guy" this is a rounding error, but for a part time fast food worker or part time retail worker, a long commute can be a large fraction of total income. The primary beneficiary of high school kids having after school jobs are the car makers, gas stations, insurance co, etc, the kids often net less than half their income, or sometimes end up in net negative income territory.

russelluresti• 13 years ago

Yeah, I'm a bit confused as well. It seems that the author doesn't believe that there's an "overall satisfaction" level made up of smaller bits of satisfaction pieces.

Yes, the long commute lowers your satisfaction in one area, but the increased salary raises your satisfaction in another area - these areas then average out.

Sure, you're less happy about your commute, but you're more happy about your salary, and that averages your level of happiness back to equilibrium. It's not just about tolerating unhappiness from your commute, it's actually about balancing/averaging your overall happiness.

mcv• 13 years ago

It seems the author is unwilling to acknowledge the impact money has on satisfaction or happiness. But utility and happiness are two different things.

I don't doubt that walking to work makes you happier, but you can't go to a shop and exchange that walk for a bigger house or a nice vacation. Money can do that. If you're unhappy with the communte, you can spend the extra money on getting more happiness out of other aspects of your life. That is utility.

It's silly to argue that money doesn't provide utility; nothing provides such flexible, universal and measurable utility as money does. But does it buy you happiness? Only if you're poor, other research has shown. Once you have comfortable wealth, money stops providing additional happiness.

So overpaid CEOs should take a pay cut to be able to walk to the office.

(Would he accept an hour-long communte for $500 extra per month? Of course not! That's pocket change to him. But for 40% on top of his already excessive salary? Probably.)

Spooky232• 13 years ago

Say I live in New York and have a 2 hour commute to Long Island or whatever. Winter comes around, it gets dark at 4:30PM and I get home at 7. By the time I get home, I want to eat, zone and get to bed.

Unless I have responsible teenage kids or a spouse who doesn't have outside employment, that means that I NEED to hire out all sorts of routine tasks needed to get through life in a comfortable way. Things like snowplowing (or lawn mowing) ($100+/mo), cooking ($30-50/day to get takeout for a family of 4), household cleaning $80/week), laundry ($40-100/week), etc. $6,000/year. That's alot of money when you think that a professional, high paying job in something like IT pays $70-120k.

I made the choice to live close to where I work -- about 10 minutes. That means that I recapture about 18 hours of my life back every week compared to someone commuting 2 hours.

samspenc• 13 years ago

I'm in a similar situation (live in NJ instead of NYC) but I do wonder: $6000 / year = $500 / month. I could save at least that much (more like $500-$1000 / month) living in Long Island or NJ instead of Manhattan.

Having said that, I do hate long commutes. I would love to live in Manhattan, but it is just prohibitively expensive.

kabouseng2• 13 years ago

One should also be careful about making blanket statements. For a high earning individual it is possible no amount of additional pay will compensate for the lost time.

stef25• 13 years ago

That's exactly why I want to switch to a lower paying job to be closer to home.

JoeAltmaier2• 13 years ago

I moved from Silicon Valley back to my hometown after 10 years, at a 50% pay cut. Still was paid 50% more than my geo-contemporaries. And since I moved I've gotten into consulting, which is location-independent, and my pay is back up to Valley levels. So pretty sweet deal.

This only worked because I had contacts in the business. That got me steady contracting work all this time (decades).

droob• 13 years ago

Also, in this example, the part they got wrong-ish is kinda beside the point. Most people will read it as "a person with a 1-hr commute has to earn (yadda yadda yadda) more money to be as satisfied with life…"

wac• 13 years ago

So this blogger has pointed out 2 problems with a single Guardian quote. The first point doesn't make sense to me as it seems to argue that the Guardian's "be as satisfied with" means the same thing as "increase satisfaction".

The second point seems to me to be almost as poor. The blogger claims that the 40% more money claim from the Guardian is bogus since the footnote clearly shows that their calculation is in absolute Euro terms not percentages. However if you read the next sentence of the footnote:

"Full compensation for commuting one hour (one way), compared with no commuting, is estimated to require an additional monthly income of approximately 515 Euro or 40 percent of the average monthly wage. This valuation implies that the time spent commuting is worth 1.6 times the hourly wage or the average compensation for working. [...]" (Page 17, Footnote 14)

It seems that the research authors themselves argue that their research implies commuting is worth a multiple of hourly wage. Thus we easily verify that the weighted commuting hours (1.6*2) is 40% of the normal (8 hour) working day.

The Guardian could have been more accurate by adding a "average" to their quote, but I think that this is implied by the context anyway.

hyperpape2• 13 years ago

It's also a common assumption in economics that as your income increases, the amount that you value your time (in monetary terms) will also increase (thus in a lot of urban areas, living close to your work is very expensive, and outer areas are cheaper). It would be nice to see get empirical confirmation by seeing how the "cost" of the commute is different for people with higher incomes, but it's not like this is a strange claim.

sgdesign• 13 years ago

Shouldn't we be suspicious of subjective measures like "satisfaction" anyway? I know there are a lot of psychology studies based on similarly vague concepts, but I always feel like it's just too easy for scientists (to say nothing of journalists) to fudge their numbers either way to prove their point.

hyperpape2• 13 years ago

There is a lot of research on the validity or lack thereof of various measures of satisfaction. Like most areas in the social sciences, it's a complicated topic. Blanket suspicion isn't warranted unless you know something about the methods involved.

officemonkey• 13 years ago

If only economics were the only factor in commute time.

Housing price, cost of living, and public school quality play a significant role in determining where to live for many people.

I've avoided positions in cities like New York and Washington DC precisely because I didn't want to (a) live in a shoe box, (b) spend 3+ hours in a daily commute, and/or (c) pay for private schools.

I would take a pay cut to reduce my commute and relocate to a lower-cost area. How much is almost entirely based on how much I can reduce my mortgage payment.

bigdubs• 13 years ago

This is an important point and what I wish the author had made.

Your choice of where to live is determined by a plurality of factors that are hard to boil down to 'satisfaction' vs. pay.

cylinder• 13 years ago

Commuting is about attitude. Plenty of people don't mind, or even enjoy, their commutes. The future is clearly office hotels paired with remote work. Go in the office a couple of times a week to reconnect personally. Work from home the rest of the time. It's the ideal mix. Company gets to reduce their real estate requirements due to hoteling: what is an office, these days, anyways? You don't need your family photos all over your desk. You need a laptop and a phone - grab a desk and get to work. When you aren't in the office, someone else is using that desk. Corporations invented airbnb long ago.

Certain areas are quite conducive to this lifestyle. NYC metro area, for example. There are quite beautiful villages in upstate NY sitting on a Metro-North stop, about 1.5 hours from Grand Central. If you only had to do that twice a week, it's completely manageable (especially in Autumn when you can gaze out the window on the Hudson Valley line at the incredible fall foliage).

robmcm• 13 years ago

Well done for putting the effort in to check facts.

The Guardian’s bogus claim about money, long commutes, and life satisfaction

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