Nov 28

A new report shows a boost in happiness for Britons after they win the lottery but others say the feeling is ‘illusory’. Who wins the lottery anyway?

But seriously – can money buy happiness?

Jackpot!It is sometimes said that scientists have found no relationship between money and happiness, but that is a myth, according to University of Illinois psychologist Ed Diener.

The connection is complex, he says, but the fact is that very rich people rate substantially higher in satisfaction with life than very poor people do, even within wealthy nations.

“There is overwhelming evidence that money buys happiness,” said economist Andrew Oswald of the University of Warwick in England, who added that the main debate is how strong the effect is.

Mr Oswald recently reportd a study of Britons who won between US$2,000 and US$250,000 in a lottery. As a group, they showed a boost in happiness averaging a bit more than 1 point on a 36-point scale when surveyed two years after their win, compared to their levels two years before they won.

Mr Daniel Kahneman, a Nobel Prize winner and Princeton University economist, and his colleagues recently declared that the notion that making a lot of money will produce a good overall mood is “mostly illusory”.

They noted that in one study, people with household incomes of US$90,000 or more were only slightly more likely to call themselves “very happy” overall than people from households with incomes of US$50,000 to US$89,999.

The rates were 43 per cent versus 42 per cent, respectively.

Dagobert's MoneyMembers of the high-income group were almost twice as likely to call themselves “very happy” as were people from households with incomes below US$20,000.

But other studies, rather than asking for a summary estimate of happiness, follow people through the day and constantly record their feelings. These studies show less effect of income on happiness, said Mr Kahneman and his colleagues.

There is still another twist to the money-happiness story. Even though people who make US$150,000 are considerably happier than those who make US$40,000, it is not clear why, said psychologist Richard E Lucas of Michigan State University.

Does money make you happier? Or does being happier allow you to earn more money later – maybe by way of greater creativity or energy? Or does some other factor produce both money and happiness?

There is evidence for all three interpretations, said Mr Lucas.

In any case, researchers say any effect of money on happiness is smaller than most daydreamers assume. “People exaggerate how much happiness is bought by an extra few thousand (dollars),” Mr Oswald said. “The quality of relationships has a far bigger effect than quite large rises in salary.

It’s much better advice, if you’re looking for happiness in life, to try to find the right husband or wife rather than trying to double your salary.” – AP

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written by Chris

8 Responses to “Does Happiness come with Money?”

  1. RajNo Gravatar UNITED STATES Says:

    Not having any money can cause misery based on my own experiences.

  2. MaxNo Gravatar THAILAND Says:

    Yep, I’ll go for money every time. Whenever I manage to get some it always puts a smile on my face.

  3. DaveNo Gravatar UNITED STATES Says:

    Even though I’ve doubled my annual income in the past 5 years, I consider myself no “happier” than I was at 25. To quote Notorious B.I.G. “more money, more problems.”

  4. Is a Nomadic Lifestyle for you? | nomad4ever UNITED STATES Says:

    […] If you have a low demand in luxury assets, that’s basically it. Reject being a Slave of the World of Consumerism, give up the material temptations of the medial advertised Lifestyle. People survive everyday in all parts of the world. And mainly happier than in developed countries. Why do you always see people in 3rd world countries smiling, even though they don’t own anything? Because they still enjoy life in its basic form and happiness doesn’t come with money. […]

  5. Attitude | Leave America UNITED STATES Says:

    […] If you have a low demand for luxury assets, that’s basically it. Reject being a slave of the world of consumerism; give up the material temptations of the media-advertised Lifestyle. People survive everyday in all parts of the world without being slaves of consumerism. And they are mainly happier than in developed countries. Happiness doesn’t come with money. […]

  6. SimonneNo Gravatar ROMANIA Says:

    This definitely applies to me. Before quitting my job, I was earning 5 times more than I do now, when I do only what I like and when I like it. I was happy before, but I’m even happier now. I spend much less on clothes, shoes, gasoline and junk food. My days are three hours longer, because I don’t have to drive to and from work, so I can enjoy my house which I was lucky to be able to fully pay for, when I was employed.

  7. RexNo Gravatar UNITED STATES Says:

    Coming from a person had been working over ten years “sure money doesn’t buy happiness but for one hell of a down payment on one”

  8. ChrisNo Gravatar INDONESIA Says:

    You are right, if that is what makes you happy. Other people don’t need an own apartment or down payment, as it ties them to the banks and makes them immobile. ;)

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