Money DOES Buy Happiness?

In a recent blog post, we explored research out of Princeton University that suggested that income does affect a person’s overall satisfaction with life, but seems to have little effect on a person’s emotional well-being, which reflects everyday life experiences.

Now a new study out of The Wharton School of the University of Pennsylvania, led by Daniel Sacks, Justin Wolfers and Betsey Stevenson, suggests that more money you have, the more satisfied you are with life. The study further suggests that an individual’s level of happiness is very dependent on the economic prosperity of the country in which they live. In general,  the wealthier a nation is, the happier its citizens are.

Do you think this is true?

The study, entitled Subjective Well-Being, Income, Economic Development and Growth, investigated the relationships between subjective well-being and income in over 140 countries.

As described in their abstract, their study showed that “richer individuals in a given country are more satisfied with their lives than are poorer individuals, and establish that this relationship is similar in most countries around the world.” Furthermore, their study showed that  “as countries experience economic growth, their citizens’ life satisfaction typically grows, and that those countries experiencing more rapid economic growth also tend to experience more rapid growth in life satisfaction”

According to the Central Intelligence Agency (CIA) website, the richest country in the world is Quatar, with a gross domestic product per capita (GDP) of $ 145,300

4 responses to “Money DOES Buy Happiness?”

  1. Keith D. says:

    I haven’t read the study yet but (at least until I do) I wouldn’t jump to conclusions about its results. There are other factors to take into account. If you found a society that has basically no “wealth” or concept of GDP and wasn’t in contact with the rest of the modern world, how would you go about correlating their wealth with their reported life satisfaction? How much of what’s being measured in the study has to do with a person’s or country’s *relative* wealth with other people and other countries and their reported life satisfaction?

    Another thing to consider is that it may not be money or wealth at all that’s having the effect, and although it’s semantic, it’s important to note the difference. Maslow’s hierarchy ( http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs ) of needs shows that money (as well as employment, a home, health etc.) are on a lower tier of the hierarchy of basic human needs, just above physiological needs such as breathing, food, water, sleep etc. The “safety” needs have to be met, according to his theory, before a person can begin to experience the higher levels of love/belonging, esteem, and self-actualization, because the safety needs are a higher priority and without those things in place, there is little time to worry about the higher tier needs. This study may not do much more than confirm Maslow’s theory of human motivation.

  2. Keith D. says:

    Sorry, the link posted above didn’t work, you’ll have to copy and paste the text itself or google “Maslow’s hierarchy of needs” to view it, unless this one works. http://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs

  3. Manuela says:

    While you don’t have any parameters to compare what others have, (i.e. in little separated villages in the Andes) you don’t know what you are missing. But i.e television can already change that situation.
    On the other hand I would say, that a certain amount of money on ones banc account probably affects the happiness of its holder. Not because you have money, but you have a backing and you are therefore more calm and have less “everyday-worries”. But this is only valid until a certain minimal amount in relation to the needs in a society/country. Once you have passed the critical minimum level – you also leave the permeant pressure of worries behind.

  4. Russ Conte says:

    I would say the conclusions of the study are hogwash. My one suggestion for the authors of the study would be to get out in the real world and just look at those with lots of money. Take the rich sports stars, musicians, hollywood elite – do *any* of them strike any rational person as the happiest people in the United States? Would any rational person say the two happiest people in the USA are Bill Gates and Warren Buffet? Or why is it that the profession with the highest suicide rate is psychiatrists? They make tons of money – and still kill themselves in incredible numbers.

    I would suggest an excellent meta analysis of the characteristics of happiness. One is The Law of Happiness by Dr. Henry Could, which can be found here: http://www.amazon.com/Law-Happiness-Spiritual-Wisdom-Science/dp/143917699X/ref=sr_1_4?ie=UTF8&qid=1296781412&sr=8-4. A famous researcher on the subject is Martin Seligman, and I’d suggest his book titled Authentic Happiness: http://www.amazon.com/Authentic-Happiness-Psychology-Potential-Fulfillment/dp/0743222989/ref=sr_1_1?s=books&ie=UTF8&qid=1296781455&sr=1-1. Anyone familiar with the literature in the field can go on and on. Long story made short – money buys things and services – NOT happiness. The notion that money does buy happiness is hogwash, and that’s putting it very politely. Research shows that many other factors impact happiness, and money is fairly far down the list of factors.

    Russ Conte

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