Can Money Buy Happiness?

david_myers
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The Washington Post reports that money can buy happiness. To emphasize the joys of wealth, it displays this glamorous couple enjoying a sumptuous private jet meal. “Whoever said money can’t buy happiness isn’t spending it right,” proclaimed a famous Lexus ad.

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The Post draws from an excellent “adversarial collaboration” (when scientists partner to test their opposing views) by psychologists Matthew Killingsworth and Daniel Kahneman, facilitated by Barbara Mellers. Killingsworth had questioned Kahneman’s report of an “income satiation” effect, with well-being not much increasing above annual incomes of $75,000 (in 2008 dollars, or near $100,000 today). With the exception of an unhappy minority, happiness does, they now agree, continue rising with income. A figure from Killingsworth’s PNAS article (“Experienced well-being rises with income, even above $75,000 per year”) illustrates:

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But note that, as is typical with economists’ reporting of money-happiness data, the x-axis presents log income. (Unlike a linear income x-axis, which adds equal dollar increments, a logarithmic scale—as you can see—compacts the spread.)

So what if we depict these data with an x-axis of linear dollars (the actual dollars of real people)? We then see what others have found in both U.S. and global surveys: happiness indeed rises with income, even beyond $100,000, but with a diminishing rate of increased happiness as income rises from high to super high.

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Multiple studies show the same curvilinear money-happiness relationship when comparing poor with wealthy nations (as illustrated in this report, again scaled with actual, not log, income).

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Moreover, an international survey of more than 2000 millionaires from seventeen countries found that, at net worths above $1 million, more wealth is minimally predictive of happiness (though millionaires enjoy more work autonomy and time for active leisure).

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And, as Ed Diener and I reported in 2018, economic growth has not improved human morale (and teen girls’ morale has plummeted). In inflation-adjusted dollars, U.S. adults, albeit with greater inequality, are three times richer than 65 years ago, with bigger houses, new technologies, home air conditioning, and more per person cars and dining out. We have more money and what it buys, but no greater happiness.

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Nevertheless, today’s undergraduates (in the annual UCLA American Freshman survey) continue to believe—entering collegians rate this #1 among 20 alternative life objectives—that being “very well off” matters, a lot. It’s the modern American dream: life, liberty, and the purchase of happiness.

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For low-income people, money does buy necessities and greater freedom. Money matters. And extreme inequality is socially toxic. But as the above data show, once we have income security and more than enough for life’s essentials, each additional $20,000 of income pays diminishing happiness dividends.

Finally, we need to remember that these are correlational data. If higher-income people are somewhat happier, it may be not only because money matters, but also partly because happiness is conducive to vocational and financial success (a depressed mood is enervating).

What U.S. President Jimmy Carter told Americans in 1979 remains true: “Owning things and consuming things does not satisfy our longing for meaning. We’ve learned that piling up material goods cannot fill the emptiness of lives which have no confidence or purpose.” Carter echoed William Cowper’s words from 1782: “Happiness depends, as nature shows, less on exterior things than most suppose.”

Happiness depends less on gratifying our escalating wants than on simply wanting what we have. And it depends more on supportive social connections that satisfy our need to belong, and on embracing a meaning-filled sense of vocation and a spirituality that offers community and hope. Money matters, but it matters less than images of luxury private jet travel might lead us to suppose.

What do you think: Might these facts of life inform our conversations about lifestyle choices, public income distribution policies, and inherited wealth?

(For David’s other essays on psychological science and everyday life, visit TalkPsych.com or his new essay collection, How Do We Know Ourselves: Curiosities and Marvels of the Human Mind. Follow him on Twitter: @davidgmyers.)

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About the Author
David Myers has spent his entire teaching career at Hope College, Michigan, where he has been voted “outstanding professor” and has been selected by students to deliver the commencement address. His award-winning research and writings have appeared in over three dozen scientific periodicals and numerous publications for the general public. He also has authored five general audience books, including The Pursuit of Happiness and Intuition: Its Powers and Perils. David Myers has chaired his city's Human Relations Commission, helped found a thriving assistance center for families in poverty, and spoken to hundreds of college and community groups. Drawing on his experience, he also has written articles and a book (A Quiet World) about hearing loss, and he is advocating a transformation in American assistive listening technology (see www.hearingloop.org).