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Money Doesn't Make Neurotics Happy

Woody Allen as Alvy Singer in Annie Hall
Source: Annie Hall | MGM
Woody Allen as Alvy Singer in Annie Hall

I remember when I was younger and made half the salary I do now. I kept thinking, "If I could just make twice as much money, things would be perfect." I got lucky. I now make twice as much money. So these days I think, "If I could just make twice as much MORE ..."

And so it goes.

Some people just can't be pleased, and the more neurotic you are, the less likely you'll be pleased with a higher salary. That's the result of research done by economist Eugenio Proto at the University of Warwick in the UK.

He's published a paper suggesting that "neurotic people can view a pay raise ... as a failure if it is not as much as they expected." Apparently, when Woody Allen looks a gift horse in the mouth, he smells bad breath.

His character, Alvy Singer, describes the neurotic’s outlook on life this way in "Annie Hall"—"Full of loneliness, and misery, and suffering, and unhappiness, and it's all over much too quickly."

The Warwick paper, co-authored by Aldo Rustichini of the University of Minnesota, explores Neuroticism (which sounds like "eroticism" but isn’t, believe me). Specifically, it looks at Neuroticism’s impact on Life Satisfaction, which is defined as "the gap between aspired and realized income." Because it's all about the money, isn’t it?

Neurotics tend to be happier than other people when getting a pay raise at lower income levels, and less happier than others when the same thing happens after they become rich. "If they are already on a higher income they may not think the pay increase is as much as they were expecting," writes Dr. Proto. "So they see this as a partial failure and it lowers their life satisfaction.”

But aren’t neurotics dissatisfied with everything? Not just money, are they ever happy about love, their outer appearance, their inner peace, social standing, friendships, airline seat back position, jeans making them look fat, the safety of Chinese takeout?

Even so, you have to be really neurotic to not appreciate a pay raise in an economy where so many people are a) lucky to have jobs, and b) lucky to avoid a pay cut. The researchers suggest there could possibly be an alternative theory for the lack of satisfaction about a pay raise.

This other theory is that "higher income is also associated with higher variance of income." Neurotics could be fearful that a pay raise isn’t satisfactory because it may not make up for fluctuations in future income. It’s the future they’re worried about, not how their new pay grade compares to leaps they’ve made in the past.

Or here’s a thought … maybe they feel guilty? Alvy Singer would agree. "I can't enjoy anything unless everybody is," he says in the film. "If one guy is starving someplace, that puts a crimp in my evening."

Alvy, shut up, take the pay raise and say "thank you."

Questions? Comments? Funny Stories? Email funnybusiness@cnbc.com

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  • Based in Los Angeles, Jane Wells is a CNBC business news reporter and also writes the Funny Business blog for CNBC.com.

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