More Money Does Buy More Happiness
Researchers and economists have been debating this idea for decades, and a new study in the journal Emotion sheds more light on the role money plays in increasing happiness levels.
"Does money buy happiness?" asked economist Richard Easterlin in a famous 1973 essay in The Public Interest. His conclusion was that once a certain level of economic development had been achieved, greater wealth and income did not lead to greater overall happiness. At an aggregate level, more money does not buy more happiness, he claimed.
A new study in the journal Emotion presents a challenge to the Easterlin finding. Jean Twenge, a psychologist at San Diego State University, and A. Bell Cooper, a data scientist at Lynn University, examined data collected from 44,000 adult respondents to the General Social Survey (GSS) between 1972 and 2016 and found that more money does, in fact, correlate with more happiness.
The survey asks respondents to report their happiness on a three-point scale: "Taken all together, how would you say things are these days—would you say that you are very happy, pretty happy, or not too happy?" The researchers then parsed the data by income deciles, reporting that "twenty-one percent of those in the lowest decile described themselves as 'very happy' compared with 45 percent of those in the top decile; thus, those at the top of the income scale were more than twice as likely to be very happy than those at the bottom."
Others have challenged Easterlin before. In 2012, Daniel Sacks of the University of Pennsylvania and Betsey Stevenson and Justin Wolfers of the University of Michigan published an analysis in Emotion finding that richer people are happier than poorer people within individual countries and that people in richer countries are happier than people in poorer countries. Over time, they found, increased economic growth leads to increased happiness. "The data show no evidence for a satiation point above which income and well-being are no longer related," the trio concluded.
Nevertheless, Easterlin and other scholars continue to argue that the "Easterlin Paradox" is real. Some cite 2010 research in the Proceedings of the National Academy of Sciences by Princeton economist and Nobelist Angus Deaton and his colleagues that supposedly found happiness does not increase once an individual's income reaches about $75,000 per year. What the study actually found is that more money does not affect the level of day-to-day joy, stress, and sadness but does correlate strongly with rising measures of overall life satisfaction.
The American editor Beatrice Kaufman once declared, "I've been poor and I've been rich. Rich is better." It turns out that she was right.