Money Can Apparently Buy Happiness

Feeling down? Money might help, according to Betsey Stevenson and Justin Wolfers. The Wharton economists released a paper arguing that countries with higher gross domestic products have happier citizens. The study shatters the conventional wisdom known as the Easterlin Paradox, which holds that GDP and happiness are largely unrelated.

Prof Wolfers said he and Prof Stevenson had reached their dissenting conclusion partly owing to improved international statistics, covering more countries – poor as well as rich – and a greater number of happiness surveys that had been conducted over the past three decades.

The paper will be discussed next week at the spring economic conference of Brookings, the think-tank, and is likely to provoke lively debate.

Prof Easterlin, who has seen a draft of the paper, said he believed that as far as he was concerned his paradox still stood.

While commending his younger critics for “serious research”, he said they needed to focus more on what was happening within specific countries, rather than “throwing all of these countries together”.

A quick glance at the IMF’s GDP rankings show a few glaring contradictions. China ranks two notches higher than France in GDP, not happiness, and everyone’s favorite Middle Eastern playground, Iran, falls just two slots behind Denmark. And, of course, everyone is sadder than the United States. Um, maybe this Easterlin fellow was right after all.

Money can buy you happiness, say researchers [Financial Times]
List of countries by GDP [Wikipedia]

Comments

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  1. bohemian says:

    Not buying it. Iran two slots below Denmark?

  2. Crrusher says:

    this is stupid, mexico is happier than us as well and we make far more than they do.

  3. soapdish says:

    Whoever says money can’t buy happiness is simply shopping in the wrong places.

  4. EllenRose says:

    I suggest that well-fed, vigorous, healthy people make for both a better economy and more happiness. A look at national health statistics would be informative.

  5. snoop-blog says:

    of course it buys happiness. who didn’t know you could buy hookers and blow?

  6. DeafLEGO says:

    Two words… FACKING DUH! Anyone who says elsewise or says they will continue working at their shitty job for $7 after winning a $200M lotto are IDIOTS!

  7. Flibbetigibbet says:

    I think David Lee Roth nailed it: “Money can’t buy you happiness, but it can buy off a lot of unhappiness.”

  8. Trai_Dep says:

    It’d bet the peak takes a bit hit once the Maslow needs are met. It’s sort of hard to sing Hi Ho, Hi Ho when your eyes are being gouged out by a gang of ruffian street children to sell on the international cornea market.
    On the bright side, those kids are less likely to have adult onset diabetes, and there are more of them, so hey, maybe it IS a happier country than Switzerland!

    The world is a happier place than the USA because George Bush doesn’t run it.

  9. humphrmi says:

    @DeafLEGO: On the other hand, there are lots of stories of people who won lotteries and a few years later were broke and miserable: [articles.moneycentral.msn.com]
    Granted, most of those stories involve people making poor decisions after winning. But, the point is, lottery winners aren’t more happy either.

    I don’t believe money buys happiness; however I am a big believer in the adage “There is no problem so big that you can’t throw money at it” ;-)

  10. ClayS says:

    Maybe per capita GDP makes a little more sense if you want to believe that a single economic statistic is going to have a 100% correlation to happiness.

    [en.wikipedia.org]

    What country are people risking their lives to sneak into in order to make to good life for themselves? Last I heard it wasn’t Denmark, China, Iran or France.

  11. SpecialEd says:

    I have lived paycheck-to-paycheck before and I can say that having money makes me much happier.

    Not the spending of money, but the fact that I have money to buy what need and most anything I want is what makes me more secure and happier.

    Living with my back to the wall as a slave to my creditors was miserable.

  12. XopherMV says:

    You have to look at GDP per capita. Iran makes a lot of money, but it has a lot of people, so it’s GDP is $12,300 per person. Denmark makes less money than Iran, but it also has less people. Denmark’s GDP is $37,400 per person.

    So yes, it does make sense that people in Denmark are happier than those in Iran. And yes, the GDP numbers bear that out.

  13. iMe2 says:

    This is consistent with micro-level research that shows making more money only “buys” more happiness if it’s lifting you out of hardship, otherwise you have an initial boost (say for ex. after a raise) but in the long-run you maintain a general equilibrium level. So by including poor countries their results makes sense.

    Btw Wolfers is the guy who came out with the study on NBA referees having a subtle bias towards players of their own race.

  14. ConsumptionJunkie says:

    I think it depends on what is around you. Even though Mexico is a poor country, its neighbors make it look rich, relatively speaking.

    Recently, Honduras was named as the poorest country in the West. Number two poorest country in the Western Hemisphere is Haiti.

  15. Dobernala says:

    Well, money makes people happy because that is how they are conditioned. They are conditioned to crave ‘things’ to bring meaning to their life. This is because society has degenerated to the point where the only thing to strive for is what can be bought at the store.

    In saner times, happiness was derived from living in a ‘whole’ society where natural social interactions weren’t repressed by our corrupt individualistic materialism. Communities with thriving cultures made people happy – not worship of wealth and money like a certain eastern culture has imposed on us.

  16. Flibbetigibbet says:

    “Communities with thriving cultures made people happy – not worship of wealth and money like a certain eastern culture has imposed on us.”

    Mind your own business.

  17. AnF-DuDe says:

    Well I think it does for a short amount of time.

  18. shepd says:

    @Dobernala:
    Well, with my previous job, I was craving things like enough money to pay rent on an apartment filled with mice and enough food not to be hungry. I know I am conditioned to feel that way, but I wouldn’t say I was much past stage 2 of the Maslow hierarchy.

    No, not a third world country, just an average town in Canada on (slightly more than) minimum wage.

    A surprising number of people live like this here, I’d probably say in this town alone 20% of the people are in these conditions.

  19. TechnoDestructo says:

    @DeafLEGO:

    Some 7 dollar an hour jobs aren’t shitty, they just don’t pay well.

  20. Jim C. says:

    If you’re unhappy because you don’t have enough money, of course more money will make you happier. Beyond that there may be doubt, but most people would be willing to risk it. :)

  21. Jim C. says:

    @Dobernala: IMO that’s a load of idealistic and somewhat condescending hooey. I’ll believe it when I see you and the well-to-do researchers who determined that behave like you believe it, i.e., give up your money and live in the simple way you say is much better.

    P.S. “certain eastern culture”? Far East? Mideast? Near East? Eastern US?

  22. @Flibbetigibbet: I think Weird Al nailed it even better when he said, “If money can’t buy happiness, I guess I have to rent it”.

  23. Randomeis says:

    It buys a wave runner!

  24. Sudonum says:

    Money gives you options. You don’t have to do things that you normally wouldn’t want to because you need the money, or you can’t afford to because you don’t have the money. It’s not a matter of buying things, but having the option to say “no”, or in other cases “yes”.

  25. ceriphim says:

    @SpecialEd: I’ve got your back on that one. I spent the last two years living with – $18 a month in disposable income. Anyone who’s been through tough times can testify to how stressful it is living with bills and s**t hanging over their heads. I can’t count the number of days I’ve been unable to sleep because I’ve been stressing about past-due bills…

    People who say money can’t buy happiness haven’t recently had to bet their car won’t get repo’ed if they spend their car payment on food and electricity…

  26. jefffromNY says:

    They should look at GDP per capita, not overall GDP

  27. Micromegas says:

    People who say that money can’t buy happiness probably haven’t ever been through times when money was tight and having just a little bit more cash would make all the difference between worrying yourself to death and being able to relax. It’s true that money won’t automatically bring you all the joy in the world, but it certainly opens up more avenues to happiness than you would otherwise have.

    That said, I think it’s interesting to note that rates of major depression are much lower in third-world and developing nations than in developed, industrialized nations. Maybe all the worrying over how you’re going to feed your family keeps your priorities straight.

  28. GOKOR says:

    @DeafLEGO: I’d keep a part time job, staves off boredom and redundancy. Adds a little excitement when you get to tell off the asshole that thinks he’s better than you when you’re at a minimum wage job.

    Though I’d be taking trips whenever I got the urge.

    Money can surely buy me happiness, not strictly because I would be able to purchase anything I want, but because I wouldn’t have to work my ass off trying to get by, making sure I have enough to pay all my bills and still be able to eat and fill up my gas tank.

  29. aikoto says:

    quotes about money from me:

    There’s no such thing as too much money, only lack of imagination.

    Money is the root of all opportunity

    Money MAY not make you happy, but lack of money DEFINITELY will.

  30. capt1kern says:

    I was on the Circuit Shitty discussion I thought. Oh well. I’ll combine the two. Money gave me the ability to buy 3 flat screen TVs there, the largest 32′Sony I got a year to pay, no interest. Had to exchange the 19′ Polaroid which they neglected to tell me didn’t have both tuners so didn’t work with cable (ton of time before a salesman in CC with half a brain figured that out, plus day before an all day wait for my cable company who said it was low quality–(wrong) plus talking to Polaroid over and over who assumed it was defective but wouldn’t pay for the shipping, traded it for a Samsung( add $300) and the 22′ Element (picture faded in 3 weeks)I exchanged for a Sharp (add $200). Also bought an open box mini DV which has been in for repair 3 times.(They should have replaced it but changed the policy to FOURTH TIME. I filmed a whole weekend with no sound and didn’t know it.

    I buy my computers and printers and associated equipment at Best Buy. I hope CC syays around for the overpriced warranties for those tvs!!
    Also bought Onkyo Receiver at CC and Harmon speakers at Best buy. Previously went through 3 TIABs : Sony-5 changer broke 1st day, Pioneer, “wireless” and other speakers useless and finally a Samsung HT in a Box–5 DVD changer broke the fourth day.Had to open it up at CC to get the cds out. DVD/VCR Recorder- Tape got stuck 1st day, lines in the DVD copies. They have a whole collection of my returned stuff there! There’s always one salesman in each store who knows a little more, you just have to find him! What I truly hate is the molasses line at CC, they need to speed it up or have a coffee pot. CC has good prices but higher on extended warranties. SOMEONE tell me , are they going down?