Money can buy you happiness… sort of
What if the key to happiness lay in numbers?
Or more specifically, economics. On its face, that seems fairly nuts. Our joyous memories are generally about people or feelings: a night of dancing with abandon, a hug from a child, the certainty of helping another person.
The search for happiness has bedeviled generations of lovers, writers; even the founders of our country of course who took only a swipe at its pursuit – not attainment – in our Declaration of Independence.
And yet, we buy, inserting money into this equation.
For the essentials: shelter, food, security for our families.
The more frivolous things. To fill a need, perhaps? The post-breakup pair of shoes. The clichéd mid-life crisis sports car.
I’ve been reading some economic research on happiness that my friend Jim Tankersley turned me on to. Richard Easterlin, a professor at the University of Southern California, examined research on money, psychology, and contentment.
Back in the 1960s, a social psychologist named Hadley Cantril asked people what they would need “for their lives to be completely happy,” Easterlin writes. And pretty much everywhere, no matter their circumstances or culture, people ranked their level of living first, then the desire for a happy family life.
Easterlin goes on to cite studies showing that married people tend, on average, to be happier than single ones (debate away, as needed).
And then comes the part that really intrigues me: our measure of happiness isn’t fixed. It depends on our neighbor’s.
So while research showed that people with a higher income tend to report being happier, that didn’t hold up over a whole life.
“Indeed, if happiness and income are compared at any point in time,” Easterlin writes, “those with more income are, on average, happier than those with less. But what happens to happiness as income goes up over the life cycle – does happiness go up too? The answer is no; on average, there is no change.
So what’s going on? Well, we’re doing everything our mothers told us not to, and comparing ourselves to our other people. No matter how well we do, if it’s not better than everyone around us, we don’t feel like we’re attaining something, because our internal norms are changing. And p.s., Easterlin says it makes us kinda Grinchy: “The subversive effect of rising internal norms also explains why people think that over the life course more money will make them happier, when, in fact, it doesn’t.”
So what to do?
Awhile back, I interviewed a psychologist, Ryan Howell, about this paradox.
Here’s the trick: spend on experiences, not things.
There is a reason that mental snapshot of your last vacation brings you so much joy. The “buy high” you have from a physical thing? It doesn’t go away if you’re investing in adventures, connections and people. Year after year, you can unpack those memories and savor them.
Et voila! Money just bought you happiness.
Maybe the dismal science is good for something.
News and information you need, from a source you trust.
In a world where it’s easier to find disinformation than real information, trustworthy journalism is critical to our democracy and our everyday lives. And you rely on Marketplace to be that objective, credible source, each and every day.
This vital work isn’t possible without you. Marketplace is sustained by our community of Investors—listeners, readers, and donors like you who believe that a free press is essential – and worth supporting.