This seemed to contradict a well-publicized study claiming that money doesn't make people happier at least in the U. The answer turns out to be complicated, because happiness is complicated. But if money isn't buying you happiness, we do know this: You're probably not spending it right — and there are moves you can make to change this, even in tepid economic times.
When Daniel Kahneman , winner of the economics Nobel Prize, and Angus Deaton of Princeton set out to answer the question of whether money buys happiness, they plotted household income against such variables as how much stress people felt and whether they smiled or laughed a lot yesterday.
Curiously, few headlines about the Kahneman and Deaton study reported the second finding that money does buy this alternate form of happiness. Stevenson and Wolfers' study confirmed this. Whoever said money can't buy happiness had it only partly right. Money can, indeed, boost your general sense of contentment, to a degree. One qualification is that there's no perfect link between higher wealth levels and rising contentment. That is, low-income people who suddenly enjoy a wealth spike — from a new job, lottery win, inheritance or something else — often become a lot happier.
But as wealth rises, happiness increases tend to level off. Part of the diminishing-return effect can be explained by adaptations — as wealth rises, people adjust or get used to their new and better circumstances, she said. Another factor involves expectations and aspirations. Once enough money is earned to cover basic needs, everyday purchases and loans, people may be driven to increase earnings by comparison to others or a desire for material gains.
And that, Jebb said, could prove a tipping point where more money results in a lower well-being. Those costs include increased workloads and less free time, the study notes, which "might also limit opportunities for positive experiences.
The income points in the study apply to single-person households, the authors note, but can be determined for families by multiplying the figure by the square root of a household size.
Some of the biggest changes were in how people felt about their spiritual lives. Americans have never been the happiest bunch, Gerzema says. Distraction and a lack of control may be part of the reason why only about a third of Americans say they are happy, Gerzema says. Perhaps we wear it like a coat of arms.
Getty Images. Alexandra Sifferlin. Happiness Guide. View Sample. All rights reserved. TIME may receive compensation for some links to products and services on this website.
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