Money and Happiness: It Really Is All Relative
Posted April 12th, 2011
Some people believe that money cannot buy happiness, while others believe just the opposite.
But the increasing amount of research on the subject suggests that….it’s complicated.
There are a number of different factors that affect the relationship between money and happiness. These other factors include things such as whether you live in an advanced industrialized country or a third-world nation, what kind of things you spend your money on, how you compare your income to others, and what you do with your time.
Early research on the subject suggested that beyond a minimum level, the amount of money someone earned really didn’t make a huge difference in his or her happiness. Studies showed that while rich people are indeed happier than poor people, people in rich countries were not greatly happier than people in not-so-rich and poor countries. The studies showed that the happiness quotient is relative – it’s in the comparisons where happiness lies.
What all of this means is that the connection between wealth and happiness is really a hard one to grasp. Moreover, it’s even hard to come up with a good definition of what happiness is for different cultures.
One group of Wharton researchers, who looked at hundreds of thousands of people in more than 150 countries, found that there is a strong tie between happiness and how developed a country is. The reason, according to the researchers, is that the richer countries can afford to spend more on science and technology, which in turn leads to longer, healthier lives. They said some economic indicators track strongly with happiness levels, such indicators as infant mortality and life expectancy.
People do compare themselves to others as far as wealth, and that does have an effect on happiness, but nothing like the impact of what country you live in. Both the rich and not so rich who live in advanced countries are happier than even the wealthiest who live in the world’s poorest countries. But still, the issue is not a simple one, because people are sensitive to their wealth compare to others. You would be much less happy if you were the only one to lose your job, or get a cut in pay, than if you were among many who lost their jobs or got pay cuts, according to researchers.
And when people are asked what makes them happy, money doesn’t really get a lot of credit. Answers more often refer to things like having good relationships with friends and family and making an important contribution to society.
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