It turns out trying to keep up with the Joneses can lead to your own death.
Economists have long believed our financial happiness is linked to how our personal financial status compares to our peers’. Fed researchers published the paper in search of statistical evidence that provides this assumption. In past studies, academics relied on unreliable happiness surveys to find evidence of this theory. But this is the first attempt at using suicide data and comparing correlations with county income data.
What they found has stunning implications for how we view our personal finances relative to our peers. Here are some other interesting financial characteristics that can impact your risk of suicide.
Live in Beverly Hills and Your Risk of Suicide Increases. Moving on up to the West Side could mean you’re increasing your risk of suicide. When considering the nation as a whole, low-income individuals tend to have a higher risk of suicide. This would lead you to believe that low-income counties have a higher risk of suicide, yet the Fed study shows the opposite.
Since high-income counties tend to have larger disparities in income, wealthier counties—not poorer—often see an increased risk of suicide when factoring income of victims relative to their peers.
People Out of Work Have Greater Suicide Risk. Next time you make your dreary pilgrimage to the office, you are doing more than collecting a paycheck—you are also decreasing your risk of suicide.
It’s not surprising to hear that those who are unemployed or unable to work due to disability face higher rates of suicide. Those who are unemployed increase their risk of suicide by 72 percent. However, people who are retired or on leave also have a higher risk of suicide compared to their working peers.
Suicide Rate Increases If You Make Less Than $34,000. When looking at income levels and increased risk of suicide, Fed researchers found that $34,000 is the tipping point for dramatic increases in rates of suicide. Those who earn less than $34,000 see an increased risk of suicide of about 43 to 50 percent. Meanwhile, those with incomes between $34,000 and $102,000 increase their risk of suicide by only 10 percent.
Final Thoughts. The Fed study is just one study in a body of research pointing to a link between happiness and how we measure ourselves to our peers. If the findings are true, then wealth is nothing more than feeling like you have more money than everyone else. Another way to think of it may be the more you compare your wealth to your neighbors, the harder it is to feel content with what you have. The secret to happiness might be ignoring the Joneses next door.
JP is the author of the money blog My Family Finances, a site dedicated to helping families make wise financial decisions. He is also an MBA and works in corporate finance.