DOES MONEY BUY HAPPINESS?
It is important to understand the various aspects of happiness, or more broadly, the concept of subjective well-being. In our Quality of Life Survey, we examined different facets of happiness from life satisfaction, which is a more cognitive evaluation of one’s life, to the experience of positive emotions like enjoyment and achievement.
Our review of research studies has shown that the effect of income on life satisfaction is stronger compared to positive emotions.
Having more money boosts financial security and access to resources, which in turn improves the self-evaluation of one’s life. On the other hand, money does not necessarily increase positive emotions, although some studies show that money may help to reduce daily sadness or negative affect.
As income levels rise, the question of whether money can buy happiness becomes more complex.
For those in lower income brackets, money does buy what is needed for happiness in terms of covering the essential costs of living. More money reduces the unhappiness associated with financial scarcity.
But psychological perceptions of “enough” matter for people in higher income brackets. Now that their basic needs have been met, how much more money is enough?
