1 Introduction

Upon running into a friend on the street, the first question many of us will ask is, “how are you?” This quotidian interaction touches on the importance we place on overall well-being. In the field of positive psychology, the question “how are you?” is analogous to the concept of life satisfaction (LS), which addresses a person’s cognitive evaluation of their life. Some variables often considered in such a judgment include community support, health quality, social status, and financial status. Financial status is unique from other components of life satisfaction in that it is expressed numerically, while the other components are purely subjective. This interesting twist raises the question, “if there are individual differences in how we use and think about numbers, is that difference expressed in our reports of life satisfaction?” The literature for numeracy, our ability to use and understand numbers in our heads, has shown that there are differences between how people interact with numbers. Does it follow that numeric ability has some influence on the relationship between financial status and life satisfaction? Extant research has found correlational support for this question, and the literature on income, numeracy, and life satisfaction point toward this being the case. Still, there has not been any attempt to establish a causal relationship between income and life satisfaction while accounting for numeracy. Numeracy, the ability to understand and work with numbers, is a critical skill in modern society. Numeracy is present in many surprising ways. Not only does it impact how we calculate expenses and interpret statistical information, but also how we understand medical diagnoses and manage investments. Research in the area of judgment and decision-making has found many mental heuristics that influence our decision-making; these include the availability heuristic (Kahneman & Tversky, 1973), representativeness heuristic (Kahneman & Tversky, 1981), and anchoring/adjustment heuristic (Kahneman & Tversky, 1974). Unlike the aforementioned mental heuristics, numeracy affects an individual’s decision-making ability differently depending on how well they can use and understand numeric information; thus, it is non-uniformly distributed across the population. Low numeracy can result in negative life consequences like difficulty managing finances and limiting potential career opportunities. While high numeracy correlates with greater health (Heilmann, 2020) and wealth (Bruine de Bruin & Slovic, 2021). Numeracy is a necessary skill in modern society because it is required in so many domains of life. An inability to budget or understand the cost of discounted products may not be detrimental as isolated events but compounded; they can lead to vast disparities between individuals. Low numeracy skills can lead to difficulty in making informed decisions, such as understanding the risks and benefits of medical treatments or evaluating the impact of public policies. There is also an association with negative health consequences. For example, 34 million Americans have type 2 diabetes and need to accurately calculate how much insulin they will need based on the type and quantity of food they eat. Those who are unable to make accurate calculations reliably are at risk of over or under-dosing themselves, both of which can adverse consequences. Another realm that is impacted by numeracy is satisfaction measures. Life satisfaction is a measure of how individuals evaluate their lives as a whole, and it is often used as an indicator of overall well-being. Life satisfaction can be influenced by many factors, including income, social support, health, and personality traits. It is an important aspect of subjective well-being, which is a broader concept that also encompasses affective measures. Life satisfaction is influenced by a variety of factors, including income, health, social relationships, and personality traits (Diener, Suh, Lucas, & Smith, 1999). Understanding the factors influencing life satisfaction can inform interventions to promote well-being and improve individuals’ overall quality of life. Some aspects of life satisfaction are inherently subjective, such as the quality of ones relationships or the status of ones health but income is an objective measure that can be easily measured across individuals. However, income on its own, i.e., absolute income, does not predict life satisfaction very effectively. Although an increase in income is correlated with an increase in life satisfaction, the real driver of this change is relative income, also known as rank income. This is the comparison of one’s own income to that of other people. ( FitzRoy & Nolan, 2021)( Boyce et al., 2010). Thus income can be considered a proxy for social rank as discussed by Boyce et al., 2010. As rank increases, so does life satisfaction. Based on this information and our understanding of numeracy, it must be the case that those who understand numbers accurately are also better able to assess their social rank based on rank income levels. This relationship is confirmed by Bjalkebring & Peters, 2021 who found that individuals with high income and high numeracy had greater life satisfaction than those with the same income and low numeracy. Additionally, those with low income and high numeracy had lower life satisfaction than those with the same income and low numeracy. Based on these findings, it is clear there is some relationship between income and life satisfaction, but how numeracy and social rank impact this relationship is unclear. While numeracy and life satisfaction are both essential aspects of modern life, their relationship is not well understood. Some studies have found a positive relationship between numeracy and life satisfaction, suggesting that individuals with higher numeracy skills may be more satisfied with their lives. For example, a 2016 study conducted in the United Kingdom found that higher numeracy skills were associated with higher life satisfaction, even after controlling for other factors such as income and education. Past attempts to manipulate numeric ability have been so far unsuccessful due to the myriad of confounding factors, but by varying income levels and social rank in controlled experiments, a deeper understanding of this relationship can be discovered.

2 Methods

3 Results

4 Discussion