Saturday, August 24, 2013

Forget What You’ve Heard: Money Can Definitely Bring You Happiness

From Pacific Standard:

New data show that when it comes to happiness, you can never be too rich.

Forty years ago Richard Easterlin proposed the paradox that people in wealthier countries were no happier than those in less wealthy countries. Subsequent research on money and happiness brought modifications and variations, notably that within a single country, while for the poor, more money meant fewer problems, for the wealthier people—those with enough or a bit more—enough is enough. Increasing your income from $100,000 to $200,000 isn’t going to make you happier.

It was nice to hear researchers singing the same lyrics we’ll soon be hearing in commencement speeches and that you hear in Sunday sermons and pop songs (“the best things in life are free;” “mo’ money mo’ problems”). But this moral has a sour-grapes taste; it’s a comforting fable we non-wealthy tell ourselves all the while suspecting that it probably isn’t true.

A Brookings paper by Betsey Stevenson and Justin Wolfers adds to that suspicion. Looking at comparisons among countries and within countries, they find that when it comes to happiness, you can never be too rich.
Stevenson and Wolfers also find no “satiation point,” some amount where happiness levels off despite increases in income....MORE