What About Money and Happiness?
By Steve Gillman
Are money and happiness related? Does money buy happiness?
It seems very easy for some people to say yes, and even easier
for most to say no. But I think the the truth is not so simple.
The research is interesting and mixed. Actually, the results
of the research mostly agree from one study to another, but the
interpretation of those results is where the arguments start.
For example, one worldwide
survey of happiness levels found that as incomes rose from
poverty levels towards the average for that nation (or a little
higher), people reported higher levels of happiness. Beyond a
certain point there was no gain.
This seems like common sense if we believe that worldly conditions
have anything to do with happiness at all. Peace of mind and
some level of happiness that we might call joy has much more
to do with one's mind or spirituality, but extreme poverty is
stressful to body and brain and of course it can interfere with
worldly happiness. It also makes sense that as we meet our true
physical needs money has less ability to raise our level of happiness,
because other factors become more important.
Studies like this are commonly touted in the press as "proof"
that money and happiness are unrelated. It may seem that way
to those in the United States who are making an annual household
income of more than $50,000 or $70,000 annual household income,
since they might notice only the part about no further gains
after that income level is passed. But what about the tens of
millions of people who are not making that much? They might be
more interested in the first conclusion of the studies, which
is essentially that it does make a difference when you
can pay the dentist, rent a decent place to live and eat healthy
(For a good summary of the science of "happiness economics,"
see the following entry on Wikipedia: http://en.wikipedia.org/wiki/Happiness_economics.)
Others have looked at the studies on a country-by-country
basis and decided that since the United
States is number twenty-three or so on the list of happiest
nations, that proves no link to income. Again, though,
it's a matter of interpretation and looking at the whole picture.
If we are not as happy as those living in Bangladesh or Columbia
it can certainly be for reasons unrelated to money. The more
important statistics are the ones showing that Colombians and
Bangladeshies who make more money are even happier than the residents
there who live in poverty.
Imagine if we studied whether vegetables were good for people
by comparing healthy people who ate few vegetables to obese cancer
patients who ate many more. It would appear that vegetables were
bad for people! The proper comparison would be cancer patients
who ate many veggies with cancer patients who didn't, or just
a broad cross section of people to rule out other factors. Looked
at properly we find that eating more vegetables is conducive
to health when starting with a vegetable-deficient diet, as making
more money is to happiness when starting out in poverty.
Now, obviously there is no way that money can directly buy
happiness. But it seems clear that it can buy the conditions
conducive to a happier life. Take two groups of poor people,
where one group is happier than the other on average. Give the
unhappy group more income and they may still be less happy than
the others, but measured against their prior state we are likely
to find that money helped a bit.
Money and Happiness - Part Two
Although this will confuse the issue a bit, I think it is
worth adding that perhaps money can buy unhappiness.
It is all about how it is gained and how it is used. Certainly
we can see that the pursuit of money for its own sake, or for
the sake of some dream that a person imagines will bring happiness,
can backfire. How happy can you be chasing after money in ways
that destroy your true values or at least bring more stress into
More than that, just coming into money can be disastrous for
those who don't have the wisdom to use it properly. I personally
know people who have suffered from sudden "windfall profits."
For example, a friend received eight thousand dollars in cash
one day, and was left with nothing but debt as a result. That
amount of money should improve the life of a person who normally
make only twice that much annually. But it doesn't work that
way when it is used to get rent-to-own furniture and to make
a down payment on a new car. Suddenly the money is gone and the
debt and resulting stresses are greater than ever.
There are two important points here:
1. To the extent that there is anything we can call happiness
is based on circumstances outside our own minds or souls, money
obviously can help.
2. The degree to which money and happiness are related depends
on how money is used.
The latter point is one that should be expanded on in another
article. Perhaps with wiser use of money one's happiness level
can continue to rise even when one is further up the income ladder.
We might get happier all the way up to say $100,000 annual income.
On the other hand, with wisdom perhaps the level of income becomes
even less relevant to happiness. We may find what we need without
so much money, after all.
Finally, there is one more thing worth noting here. When we
ask about money and happiness we assume that the question is
about how happy the owner of the wealth is. But consider for
a moment the billions that people like Bill gates and others
use to fight disease and poverty and illiteracy around the world
through their foundations. Again, if medical care and healthy
food and freedom from ignorance can bring any little bit of happiness,
money is the means in those cases, even when it is not directly
in the hands of the people it helps.