Does Money Buy Happiness?

High Income Improves Evaluation Of Life But Not Emotional Well-Being

Money Can’t Buy You Happiness…. Such a cliche that quite frankly most people don’t believe but do like to quote. In fact most people have some aspiration to be what they normally consider to be “very well off” which is normally multi millionaire status and most people crave after certain objects including cars or home entertainment systems.

High Income Improves Evaluation Of Life But Not Emotional Well-BeingMoney and Happiness are intrinsically linked in our modern society but I have always thought it is looked at the wrong way and headlines that wrung out last year seemed to agree with that! Of course money can solve a lot of issues that can make you unhappy. Not making your rent, paying your bills or being able to send your kid to school with smart clothes can depress and make you stressed and unhappy. So rather than money making you happy I think it’s better to say lack of money can cause some unhappiness. I know it seems like a matter of semantics but the research that fuelled the “Happiness doesn’t increase after $75000″ headlines seems to some what agree.

The 2010 study from Daniel Kahneman and Angus Deaton from the Center for Health and Well-being, Princeton University did he actual study that makes for a very interesting read and looks at a lot of factors. They believe happiness can be split into emotional well being and life evaluation, two types of happiness that are differently affected by having more money. Below is the abstract from the paper.

High Income Improves Evaluation Of Life But Not Emotional Well-Being

Abstract:

Recent research has begun to distinguish two aspects of subjective well-being. Emotional well-being refers to the emotional quality of an individual’s everyday experience—the frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one’s life pleasant or unpleasant. Life evaluation refers to the thoughts that people have about their life when they think about it. We raise the question of whether money buys happiness, separately for these two aspects of well-being. We report an analysis of more than 450,000 responses to the Gallup-Healthways Well-Being Index, a daily survey of 1,000 US residents conducted by the Gallup Organization. We find that emotional well-being (measured by questions about emotional experiences yesterday) and life evaluation (measured by Cantril’s Self-Anchoring Scale) have different correlates. Income and education are more closely related to life evaluation, but health, care giving, loneliness, and smoking are relatively stronger predictors of daily emotions. When plotted against log income, life evaluation rises steadily. Emotional well-being also rises with log income, but there is no further progress beyond an annual income of ~$75,000. Low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone. We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being.
Keywords: life evaluation, emotional experience, household income, satiation, happiness

If you found this interesting then I highly suggest you to to the PNAS page and read the full study findings.

High Income Improves Evaluation Of Life But Not Emotional Well-Being

Just because some academic study says something doesn’t mean that it is 100% true, I am sure a study must exist that counters this information but none the less I think that for my view of the world I agree that money is not the foundation of the best forms of happiness and I do feel that our society does concentrate too much on it.

If we could just get away from this way of thinking then the ultra rich would be far more willing to give away their money and fix the problems of the ultra poor in this world like the likes of Warren Buffet and Bill and Melinda Gates are trying to encourage with their The Giving Pledge scheme.

Anyway that is what I think, I would love to hear your thoughts on this study and the whole subject of money and happiness?

5 thoughts on “Does Money Buy Happiness?”

  1. I believe that the love of money is the root of all evil.
    This is scripture from the Holy Bible, but admit that it’s hard to get by sometimes, considering the economy, an escalated cost of living, as necessities such as natural gas, electricity, gasoline, insurance, clothing, and food products, as well as schooling for our children. The individuals who are in high places in these services seem to only care about acquiring more money, hence the rising costs, to ensure good profit margins knowing the majority of people need these services. Do they care how it’s affecting the consumer? I don’t believe so. It appears to me that money must be making someone happier. Myself, I continue to look to the hills, from whence cometh my help.

  2. Money doesn’t buy happiness, but you’re surely more relaxed when you have no debt, some good savings and a nice retirement plan. No tot mention affording some clothing, decent food and maybe being able to travel more than every 10 years surely can lift up one’s spirit ;)

  3. I mostly agree with this study. Money may buy us some satisfaction in life in terms of stuff and experiences, but that doesn’t necessarily translate into daily happiness. Happiness in my opinion tends to stem from the simple things in life, of which money may not buy but can improve the time and experiences we have with them and thats where the 75k annual income for happiness might come in. It allows us to enjoy the people and things that bring happiness without necessarily over-stretching ourselves or bringing too much unnecessary baggage into our lives.
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