money can't buy happiness? well, actually it might.

May 5, 2008 9:37 AM

money can't buy happiness? well, actually it might (NYT).

"owning an iPod doesn’t make you happier, because you then want an iPod Touch. Relative income — how much you make compared with others around you — mattered far more than absolute income." That's what the old Easterlin paradox of "money can't buy happiness" is about.

Last week, at the Brookings Institution in Washington, two economists presented a rebuttal of the paradox. They argue that money indeed tends to bring happiness, even if it doesn’t guarantee it. David Leonhardt has a nice writeup in the NYT.

This post just has to be dedicated to jessamyn.

posted by krautland (20 comments total)

This post just has to be dedicated to jessamyn.

Um. Why?
posted by SlyBevel at 10:18 AM on May 5

Because she's rich. Like, Batman rich.
posted by Astro Zombie at 10:22 AM on May 5

money may not be able to buy happiness, but it sure buys off certain kinds of misery.
posted by rmd1023 at 10:22 AM on May 5

See also (PDF!).
posted by mw at 10:40 AM on May 5

I'm offering myself to anyone wishing to see test a hypothesis regarding money and happiness. Give me lots of money and I'll let you know how happy I am. I promise.
posted by tommasz at 10:45 AM on May 5

The Brookings Institution? The same idiots who employ Michael O'Hanlon?

Anyway, my theory is that rather then income level, income improvement is what makes people happy. Someone making $50k a year and getting a 10% raise every year will be happier then someone making $100k but with a stagnant salary.

Obviously there are a lot of other variables in play.
posted by delmoi at 10:50 AM on May 5

Give me lots of money and I'll let you know how happy I am.

Caveat: we will ask you at the moment you come face to face with your own mortality.
posted by infinitefloatingbrains at 10:52 AM on May 5 [1 favorite]

I believe money can buy happiness up to the point where you are living a comfortable "middle-class" style life. Things like being able to eat, provide for your children and their education, be financially independent, maybe own a home - those make you happy.

After a certain point it doesn't matter how many fancy cars or plasma TVs you have, they're not going to make you happier in the long term.
posted by Solon and Thanks at 11:36 AM on May 5

I keep asking God to let me win the Powerball so I can prove what a good and generous person I am. So far my appeal has fallen on deaf ears.
posted by Ber at 11:51 AM on May 5

The results could instead reflect cultural differences in how people respond to poll questions, he said.

I'm with Easterlin. Just because someone responds to a poll question with a certain answer does not mean that answer is a straightforward or simple one. And you know what they say about statistics, don't you?

Why is this post dedicated to Jessamyn? I'm pretty sure she does not believe that $$$ equal happiness.
posted by jammy at 12:37 PM on May 5

To put it in today’s terms, owning an iPod doesn’t make you happier, because you then want an iPod Touch.

To put it in today's terms, turn off the TV and stay home writing letters and see how much you still feel like you need an ipod.

This is a smarmy article. Oh look, people who don't have to worry about food and sending their kids to college are happier than people who are hungry! I'm happier when I'm not hungry too, or when there's someone around to rub my feel when I've had a bad day [I'd maybe PAY someone to do that] or when I get stuff in the mail.

The premise of this article is stupid -- comparing affluence which has more to do with a general money-having state of an economy/people, with cash which is just "can I but this ipod or not Y/N?" -- even though the map and the general conclusions are sound. This is the same thing the World Trade Organization has been telling us for decades, that it's okay to go ravage some country in the name of economic prosperity because hey, that rising tide lifts all boats! It's a shame we have to decide between a) keeping our traditional cultures and social systems and lifestyles intact vs b) opening our doors to western investment which will cure our malaria and make us import our corn. Crappy.
posted by jessamyn at 12:51 PM on May 5 [3 favorites]

The results could instead reflect cultural differences in how people respond to poll questions, he said.

I'm with Easterlin. Just because someone responds to a poll question with a certain answer does not mean that answer is a straightforward or simple one.

Be that as it may, it doesn't seem to me to be at all relevant to the main point which should be taken away from the study, which is that the study that gave us the Easterlin Paradox was fundamentally flawed.

The article seems to be saying that the Easterlin Paradox was based on a study of several decades of poll data, without taking into account the fact that the poll questions significantly changed in 1964. And once you take that fact into account, poof, no more Easterlin Paradox.

What Easterlin seems to be disputing, and what you're agreeing with him about, is the part of the (new) study that indicates "the opposite of the Easterlin Paradox may be true".

But that's fundamentally different than the other thing that the new study is saying, which is "there is no real evidence for the Easterlin Paradox". And nothing that Easterlin (or you) said seems to contradict that.

Am I wrong?
posted by Flunkie at 12:55 PM on May 5

Well, I am a sample size of exactly one, but from my perspective, I've been pretty well off (the DotCom boom) and I've been dirt poor (after the DotCom boom) and I think I was happier when I had money.

Though not for the obvious reasons: I was happily married through both circumstances, and we had a passel full of pets to keep us company, I lived in a house and had cars, and I got the same TV and internet. When I had money, I didn't buy a whole lot more stuff, and being poor just meant spending more time at home with my wife and animals.

So, I guess in terms of just being content, money didn't do much. But when I wasn't broke, I didn't have to worry about basic things like getting to work if a car died, or taking my cat in if she got sick, let alone bigger things like replacing the damaged floor in the living room or getting a new fridge or whatever. Because when I was without money, these little things became a source of constant stress for my wife and I.

So money may not buy happiness, but it certainly reduces the fear that something will break, that you can't take care of.
posted by quin at 1:30 PM on May 5

Money might not buy happiness, but it can damn sure rent it.
posted by BitterOldPunk at 2:06 PM on May 5 [1 favorite]

hello Flunkie - Sorry to have missed the main point. Here, I fixed my comment for you.

I'm with Easterlin. Just because someone responds to a poll question with a certain answer does not mean that answer is a straightforward or simple one. And you know what they say about statistics, don't you?

Better? I think so too. Because I really don't think anyone (be it Easterlin or any of the Brookings brood) is going to find hard (i.e. real) evidence either way about this question. In other words, what's fundamentally flawed is the idea that happiness can somehow be contained &/or reduced into economic formulae & abstracted statistics.

I would probably be more amenable to "Equal & just distribution of global resources can lead to happiness or at least the basic conditions for its emergence"... not quite as pithy, I know.

posted by jammy at 2:09 PM on May 5 [1 favorite]

Somewhat related:

Swedish National Institute of Public Health: Är depression en klassfråga (April 2008)

From the english summary:

"The aim of this review was to clarify if low social class increases the risk of being afflicted by depression. /.../ The survey showed that persons with a low social position had an increased risk for depression, The most noticeable differences concerned family wealth, where men lacking capital had a 3.3 times higher risk for depression."
posted by effbot at 2:23 PM on May 5

owning an iPod doesn’t make you happier, because you then want an iPod Touch.

No, an iPhone.
posted by Brandon Blatcher at 3:20 PM on May 5

The point of the saying is that happiness is a state of mind, equally accessible to all people. "Actually, money can buy happiness" rings like snobbery to me. There's a tacit "but you wouldn't know, would you?" behind it.

A friend once said money can't buy happiness (contentment, a bright outlook, etc) but it can buy fun. That I can heartily agree with - fun is more transient. You go on a ski trip, you buy a bauble, but the novelty wears off. Where does the joy come from? I didn't read the article, but I'm guessing these people don't know the real answer. I'll tell them - but it's gonna cost!
posted by AppleSeed at 3:24 PM on May 5

I know the title of the article is supposed to be glib, but the causal relationship of money--->happiness doesn't seem clear at all. Of course, money seems correlated with happiness, but I don't think even the Easterlin paradox claimed otherwise. A much more thorough study would need to be done to suss out the real relationship, taking into account all sorts of factors not accounted for here. It would be interesting, for example, to follow particular individuals who started out rich and stayed rich, started out rich and became poor, started out poor and stayed poor, etc.

effbot also brings up an important point - but again, correlation =! causation. It stands to reason, for example, that depressed people would lack the motivation to increase their economic status, or that they might be more likely to lose their jobs. The resulting hardship might then exacerbate a preexisting condition. It's cyclical rather than one-way.

That's even assuming that depression, a mental illness, should be lumped together with normal-ranged satisfaction and dissatisfaction. At the very least, it should be documented and controlled for when gathering and analyzing the data. Man, the more I think about these studies, the less I feel they say anything about anything. But then, I'm just getting all this from a New York Times summary, so maybe the actual paper is more complete.
posted by granted at 4:03 PM on May 5

Happiness is a weird state of being. From my vast range of experience, I am inclined to think it is a rather natural state for a human. It can be very transient in bad times, and quite steady in good times. But people in the worst of places will attain some, even if only for a little while.

Money can't buy it, but it does indeed buy some fun, and maybe a bit of fun is all you need to get yourself back to a state where you can be happy. And 'happy' seems to correlate with a sense of moving forward toward goals, and feeling secure in your course towards those goals.

Stress, which seems rather the opposite of happiness, seems mainly about things that block one's progress. To most adults, at least, this does seem mainly about money, as in, money to keep the car running, or even food on the table, or pay for education.
posted by Goofyy at 8:34 AM on May 6