A study of 20,000 20- to 64-year-olds found that people's satisfaction with their incomes is not strongly correlated ...

MichelleRod on July 25, 2018

Hey @Zahra thanks for you question

C does not make sense because satisfaction with income cannot be correlated with "neighborhood." In this stimulus "neighborhood" is not a measurable variable we can correlate with income satisfaction in a meaningful way. The correlation that exist in this case is one's income satisfaction with favorability of comparison of one's own income to their neighbors' incomes.

That's why E does work. Because if everybody's income increases, then there won't be a change in how my income compares to my neighbors. I got an increase, but so did they.

Hope that helps!

LH44 on July 7, 2019

Hello, it looks like the instructors previous reply was a blank message. Can someone please explain why E is correct? Thank you!

Ravi on July 26, 2019

@LH44,

Happy to help. Let's take a look at (C) and (E).

(C) says, "Satisfaction with income is strongly correlated with neighborhood."

This is a tricky answer choice, but it's off the mark. The key
take-home point is that income satisfaction is strongly correlated
with how you compare to your neighbors, but not your neighborhood
overall. It's possible someone could live in a very affluent
neighborhood but be unhappy because their income is way less than
everyone else around them. Similarly, someone could live in a very
poor neighborhood but be really happy with their income because
they're making so much more than their neighbors. Thus, (C) is out.

(E) says, "An increase in everyone’s incomes is not likely to greatly
increase people’s levels of satisfaction with their own incomes."

If everyone receives an income raise, then it's not going to change
one's relative position. Additionally, we're told in the stimulus that
true satisfaction comes with one's position relative to their
neighbors. Thus, (E) is strongly supported by the information we have
in the stimulus, so it's the correct answer choice.

Does this make sense? Let me know if you have any more questions!