Can Money Buy Happiness?

Jan 21 2010

I’ve seen this question posted quite often on all kinds of Q&A sites. Users’ answers vary greatly and most are personal opinion. In these opinions there is a lot of wisdom, regardless the answer. I’d like to take a different approach: allow me to answer this age old question based on what scientific research has to say about happiness.

Stanford researcher Sonja Lyubomirsky has studied happiness in scientifically rigorous ways for about 20 years now. She is one of the top researchers on happiness and one of many modern psychologists whose research furthers the field of positive psychology; that is, the study of human strengths (and concepts such as happiness, compassion, resilience, forgiveness, etc.) as opposed to traditional psychology which focuses almost entirely on the negative (mental disorders, brain disease, cognitive deficits, etc.).

Lyubomirsky, who originally believed that money made people happier, was forced to change her opinion on the matter after countless psychological interventions with participants and exhaustive research on the subject. Her research has helped distinguish commonplace assumptions from fact, and she has found that having more money does not make a person substantially happier. To start, humans have a genetic happiness “set-point” that determines about 50% of their base level day-to-day happiness. We operate from that set point and, believe it or not, life circumstances (rich-poor, healthy-unhealthy, beautiful-plain, etc.) play a role of only about 10% of our total happiness. There are, of course, significant traumatic experiences that can, if severe or chronic enough, damage certain brain structures (specifically, an enlarged amygdala can impair long-term potentiation in the hippocampus), making it more difficult to sustain happiness. Likewise, significant positive experiences such as marriage or the birth of a child can be transformative, and thus potentially have a stronger effect on happiness than more ordinary events.

With regards to money, however, even when people get more, better, and fancier luxuries, a natural human phenomenon known as hedonic adaptation occurs. Have you ever walked into a room and smelled something foul, but within minutes you couldn’t smell it anymore? That’s because your olfactory sense (smell) became habituated to the odor. Hedonic adaptation works in a similar manner, in that the material pleasures that you acquire or experience can boost your mood and change your state of mind for a little bit, but all those nice things slowly lose their short and long term positive effect on you. It’s as if the pleasure center of your brain gets “spoiled”.

It is well known in modern psychological literature that money is correlated with happiness to a certain point. Money can improve ones life circumstances drastically, and quality of life is definitely correlated with happiness. However, at the point at which all of a person’s basic human needs (food & water, shelter & safety, social connection of some kind) are met, money ceases to influence happiness altogether. That is, as long as you make enough money to take care of you and your family’s needs, it wouldn’t matter if you made $50,000 a year or $50,000,000.

In light of this research, the only way that I can see money actually buying happiness would be to spend it on doing the things researchers have found that the happiest people do (although most of these don’t have a dollar value):
- Devote a significant amount of time to your family & friends.
- Become comfortable with expressing your gratitude for all you have.
- Become accustomed to lending a helping hand.
- Practice optimism when imagining your future.
- Savor life’s pleasures and try to live in the present moment (not worrying about the future or the past).
- Make physical exercise and a proper diet a habit.
- Create a social support network of healthy friends and family (and be a part of others’ network of support).
- Stay committed to the things you value the most.
- Last but not least, remember that everyone (including the happiest of people) has their share of stress or poor circumstances, but it the poise and strength you show in coping in the face of these challenges that matters.

I’ve paraphrased Dr. Lyubomirsky enough here, so I’ll close by quoting her: “Happiness, more than anything, is a state of mind, a way of perceiving the world in which we reside.”

I hope I’ve provided you with another angle from which to look at this subject.

P.S. The sources for this post are below. See also “Authentic Happiness” by the father of positive psychology, Martin Seligman.

1) “The How of Happiness” (2007) by Sonja Lyubomirsky, Ph.D.

2) “Authentic Happiness” (2002) by Martin E.P. Seligman, Ph.D.

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