MattAndJojang's Blog

God. Life. Spirituality.

Does Money Buy Happiness?

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A key assumption in consumer societies has been the idea that “money buys happiness.” Historically, there is a good reason for this assumption—until the last few generations, a majority of people have lived close to subsistence, so an increase in income brought genuine increases in material well-being (e.g., food, shelter, health care) and this has produced more happiness. However, in a number of developed nations, levels of material well-being have moved beyond subsistence to unprecedented abundance. Developed nations have had several generations of unparalleled material prosperity, and a clear understanding is emerging: More money does bring more happiness when we are living on a very low income. However, as a global average, when per capita income reaches the range of $13,000 per year, additional income adds relatively little to our happiness, while other factors such as personal freedom, meaningful work, and social tolerance add much more. Often, a doubling or tripling of income in developed nations has not led to an increase in perceived well-being.

In his book The High Price of Materialism, Tim Kasser assembles considerable research showing “the more materialistic values are at the center of our lives, the more our quality of life is diminished.” He found that people who placed a relatively high importance on consumer goals such as financial success and material acquisition “reported lower levels of happiness and self-actualization and higher levels of depression, anxiety, narcissism, antisocial behavior, and physical problems such as headaches.”

The bottom line is that there is a weak connection between income and happiness once a basic level of economic well-being is reached—roughly $13,000 per year per person. To illustrate this point, the World Values Survey of 2007 revealed that people in Vietnam, with a per capita income of less than $5,000, are just as happy as people in France, with its per capita income of about $22,000. The cattle-herding Masai of Kenya and the Inuit of northern Greenland expressed levels of happiness equal to that of American multimillionaires.

Once a person or family reaches a moderate level of income, here are the factors that research has shown contribute most to happiness:

  • GOOD HEALTH  Physical, emotional, and mental well-being.
  • PERSONAL GROWTH  Opportunities for learning, both inner and outer, and giving creative expression to one’s true gifts.
  • STRONG SOCIAL RELATIONSHIPS  Close personal relationships with family, friends, and community in the context of a tolerant and democratic society that values freedom.
  • SERVICE TO OTHERS  Feeling that our lives contribute to the well-being of others.
  • CONNECTION WITH NATURE  Communion with the wildness of nature brings perspective, freshness, and gratitude into our lives.

When we look over this list, it is clear that happiness does not have to cost a lot of money. A tolerant society does not cost a lot in material terms, but the rewards to the social atmosphere in civility, congeniality, and happiness are enormous. Feelings of communion with nature and the cosmos come free with being alive. The quality of relationships with family and community grow from the quality of the time and attention we give to them. Personal growth requires nothing more than paying attention to the experience of moving through life. Feelings of gratitude for life are free.

Happiness is a nonmaterial gift that can spread like a contagion among family, friends, and neighbors—rippling out to touch people who do not even know one another. This is the striking conclusion of a study of more than forty-seven hundred people over a twenty-year period. The study found that one person’s happiness can affect another’s for as much as a year. Researchers also found that, while unhappiness can spread from person to person like an infection, that emotion appears to be far weaker, and does not spread as far or as powerfully, as happiness. The study also explored the importance of friends and social networks as a source of happiness as compared with the importance of money. The study’s coauthor states, “Our work shows that whether a friend’s friend is happy has more influence than a $5,000 raise.” In the face of economic difficulties, his message is “You still have your friends and family, and these are the people to rely on to be happy.” Happiness is a social network phenomenon and can reach up to three degrees of separation (the friend of a friend of a friend), which means that your happiness can involve persons you have not even met.

Happiness is largely a networked social phenomenon once a sustaining level of material well-being is reached. If we worried less about material appearances and thought more about soulful connections with others, we could put our life-energy into creating robust, healthy, and rewarding relationships. The more we learn about the “science of happiness,” the more we see that focusing on material acquisition and status is not serving us well and that it would be enormously helpful to redefine progress.

~ Duane Elgin

Written by MattAndJojang

August 6, 2012 at 4:43 pm

6 Responses

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  1. I agree that money can’t buy happiness, but this fellow’s arguments are pretty culture-bound.

    For example: take his statement that, above $13,000, more money doesn’t necessarily translate into more happiness. $13,000 per year wouldn’t even pay my rent, for gosh sakes. Being forced to move to a less desirable apartment while I try and figure out how to find something to eat wouldn’t make me very happy.

    His statement that “Our work shows that whether a friend’s friend is happy has more influence than a $5,000 raise” is just ridiculous. It might be so, if I were making $100,000 per year. Today? Sorry. That $5,000 would represent increased security, better health care and more options such as travel to visit relatives. Those things would make me happy.

    Granted, there is a level of consumerism and acquisitiveness in American society that isn’t healthy or happiness-creating. But if the Masai are happy, I say, “Good for them!” In the meantime, I intend to continue pursuing the almighty dollar.

    There’s one figure I’d like to know that isn’t in this article. I wonder how much money Mr. Elgin makes? I’m often amused by people with a bundle in the bank telling the rest of us we should be happy with what we have. It’s rather like Al Gore preaching green this and that while jetting around the world and squishing everyone in sight with the size of his carbon footprint.

    Just a final note – the discussion shifts in the course of this article from material goods to material “appearances”. They are quite different.

    In short, I think this one is clap-trap. Just my opinion – but of course, I’m not feeling particularly happy right now because it’s going to be 100 degrees and I stil lhave to go to work. There are bills coming due, and I’ve already spent everything on rent. 😉


    August 6, 2012 at 8:50 pm

  2. Hmmm… The figures are probably skewed and need to be revised, especially for those living in the US. Although for those of us living in a third world country like the Philippines, where the average annual income is about $2,000 – $ 3,000 per year, you can live like a king if you have an annual income of $13,000.

    Before I and Jojang met, sometime during the 90s, she lived and worked for a while in New York. And she tells me that, even during that time, having an annual income of $13,000 is not enough so that a person could live a decent life in the US.

    But having said that, I still agree with the basic premise of the article: money is not enough to make us happy. I know a lot of people who have all the money they need, and yet they’re still unhappy.

    We are also having very bad weather here. The rains have hardly stopped for almost 3 weeks now because of typhoons and monsoon rains. I hope the weather is now better in the place where you’re staying. I also hope you’re feeling better… 🙂

    ~ Matt


    August 7, 2012 at 9:48 am

  3. Oh, I absolutely agree that money isn’t sufficient for happiness! Like you, I know many very well-to-do people who are miserable, and who never will have “enough”, no matter how much they have.

    My response probably was colored by political discussions and struggles here in the US. There are some complex issues on the table, and a lot of simmering frustration and anger. Nearly half of the population pays no taxes, and lives, to one degree or another, on benefits provided by those who do pay taxes. There are terrible inequalities, and the divide is getting worse because the government seems intent on setting one group of people against another.

    Out of curiosity, I looked up the poverty level for a family of four in this country – $23,000! For a couple, it’s $15,130. And I found an interesting site detailing rents in New York City and the rest of the country. My $12,860 annually is right in line. Wow.

    The irony is that many people who have lived very good lives are losing their financial security, their jobs, their houses. Many, like me, will work far beyond the normal retirement age of 65 or 66. There will be a whole lot of people in the next years forced to learn a different way of being happy!

    Anyhow, I’m glad you didn’t take offense at my little rant. I think many here in the US are getting exhausted, and tired of people offering simplistic solutions to very difficult problems. Poor Mr. Elgin seemed to fit into that category.

    I hope your rains have stopped, too! You made the front page of Weather Underground and of course other news sources. We’re still hot and dry – heading toward 100 for at least the next week or two. But there haven’t been any hurricane threats – that’s something to be happy about!


    August 13, 2012 at 9:36 am

  4. I can understand your frustration, Linda. As you well know, all of my siblings and their families are now living in the US. And just like you they’re also struggling to make ends meet. For instance, one of my brothers who was doing very well before as a dentist now only holds clinic twice a week! He tells me that dental insurance is no longer included in most health insurance packages. He’s really struggling now…

    The rains have stopped now, but it left our country devastated, especially our largest city – Metro Manila. Unfortunately, there’s another storm brewing east of our country and expected to make landfall on Wednesday or Thursday. We’re praying very hard that it will not cause as much as damage as before…

    ~ Matt


    August 13, 2012 at 11:47 am

  5. Linda, I am surprised at your rent. My was far higher than that, but not because I lived in a really posh neighborhood. Mine was $18,000. Apparently there must be some really cheap apartments I never encountered.

    Matt, I agree with Linda this article is not viable in the US. Frankly, the numbers are so bizarre, I have to wonder where it would be viable.

    Yes, the ripple effect of happiness does indeed extend to those we do not know. If you would like to see it in action, look at the last Saturday Evening Post. The spread of happiness from there has been palpable and reached people I have never met and introduced me to some new people who felt the effect.

    “reported lower levels of happiness and self-actualization and higher levels of depression, anxiety, narcissism, antisocial behavior, and physical problems such as headaches.”

    This phenomenon is not new. It was recorded in the age of the Pharaohs. While money may not buy happiness, it is easier to be happy in a car than on a bicycle for most. The level of insincere liaisons when more superfluous money enters the picture is a direct factor in said inappropriate behaviors and lack of happiness.



    August 14, 2012 at 12:01 pm

  6. Having read your comments, Red, and that of Linda, I have to agree with both of you that the figures are not at all applicable to the US. The “moderate level of income” that the author mentions so that a person could live a decent life in the US should certainly be more than $13,000.

    But I have also to agree with this quote from the article: “the more materialistic values are at the center of our lives, the more our quality of life is diminished.” In other words, the answer to the question: “Does Money Buy Happiness?” is a resounding “No.”

    In our struggle to earn a living, it’s so easy to be focused on the materialistic aspects of life. I guess, we have to strike a balance between earning a living so that we can live a decent life with the more important things in life.

    ~ Matt


    August 14, 2012 at 1:21 pm

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