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Does money buy happiness after all?

Written By: - Date published: 4:15 pm, April 23rd, 2008 - 29 comments
Categories: articles, economy, International - Tags: , ,

In 1974, economist Richard Easterlin, published a study in which he argued that economic growth didn’t necessarily lead to more satisfaction. In poor countries, gaining the necesseties of life raised happiness but beyond those gains there was no increase. This became known as the Easterlin paradox.

Just last week, two young economists presented what they claim is a refutation of the paradox.

Read the full story in the NY Times.

(The graphic below is from the article, I’ve circled New Zealand in red. Click the image for full size.)

happiness.gif

29 comments on “Does money buy happiness after all? ”

  1. big bruv 1

    Yes yes…stick your head in the sand, the people really ARE happy living in a low wage economy, they are ecstatic about paying the highest interest rates in the western world, they LOVE dear corrupt leader and they have no problem at all that food and oil prices are rising while the minister of finance keeps stealing more money from us than he needs.

    All these things are true, it is only the biased right wing media that stops us hearing this from the people, they are ALL against dear leader and for some strange reason they want to see her lose the election.

  2. Tane 2

    Bruv, the point of the post is that people may be happier with more money. What’s your point again?

  3. Of course money buys happiness. I was walking thru the town center last year, and there was a hippy man, selling soup in the rain, with a “New Zealand Communist Party” banner next to him.

    He didn’t look too happy, the businessman that walked past him, looked real happy as he was telling his mate about the new 50 inch flat screen he bought.

    If you believe in Communism, you end up selling soup in the rain, if you believe in Capitalism you end up going home to your big screen TV.

    I know who’s happier.

    Still those on the left, believe in the Moe theory from the Simpsons.

    “Rich people aren’t happy, from the day they are born, to the day they die, they think they are happy, but they aren’t happy”.

  4. Steve Pierson 4

    The deeper question is whether people the countries in which people on high and low incomes are equally happy are those with better public services, less wealth disparity or what.

    I also wonder if less disparity in happiness correlates with more happiness overall.

    i note the happiest country is Denmark. it’s one of the richest countries but it also has very equal happiness bewtween high and low income.

  5. Bruv will be happy to see that people in socialist scumhole Venezuela are, on average, happier than those who live US – oh that’s gotta hurt!

  6. Susan 6

    Take a look at Venezuela. Bit of a developing anomaly. Poor, but happy.

    Did you catch the pun?

  7. And you really believe people who live in Venezuela are happier than people who live in the USA?

    I’m guessing you haven’t traveled much.

  8. Steve Pierson 8

    Brett. The people of Venezuela reported their happiness and the people of the US reported theirs and Venezuela’s was happier on average. But I guess you know more about those peoples’ happiness than they do.

  9. Brett:

    “Of course money buys happiness.”

    You need to look at the figure closer. In many countries there is no difference in happiness between the wealthy and others – take Denmark for example – the happiest country on earth – a country that people like you call a “socialist suckhole”.

  10. Billy 10

    Money doesn’t buy you happiness. I know lots of unhappy rich people.

    On this evidence, I guess there’s no need for a minimum wage.

  11. Steve Pierson 11

    Billy. No that’s wrong on several grounds.

    a) there is obviously some degree of correlation between money and happiness – which exactly what the report this post is about says. It’s just once you get beyond a certain level of wealth that the relationship breaks down (and that makes sense). At low levels, like the minimum wage level, an increase in income increases happiness.
    b) you need a basic level of income just to sustain your life. You can’t be happy if you’re dead and poverty, such as the lack of a minimum wage would bring, leads to shorter life expectency.
    c) the countries with less wealth disparity also have higher overall happiness. the minimum wage decreases wealth disparity.

  12. Billy 12

    Sorry, Steve. I do not do those little yellow smiley faces. If I did, you would have known I was only joking.

    This will not cause me to change my policy on the smiley faces, however.

  13. big bruv 13

    Roger

    Is that the same socialist suck hole that has education vouchers?

  14. randal 14

    sure money buys happiness especially when you are happy if people are kissing your bum! dont you guys know aaaaaanythiing?

  15. Matthew Pilott 15

    Brett Dale, I walked past a socialist on my way home. He was with friends and having a good time (maybe discussing The Revolution, Motorcycle Diaries, or they’d seen some nice ass, who knows). I also saw a capitalist, drowning a baby seal in oil.

    The capitalist was bloody loving it! I’m not sure what that proves in relation to money and happness, but if proves of course that capitalists are evil bastards. I consider happy but evil people to be sociopaths or psychopaths.

    Any other trashy wee anecdotes you’d like to share with us?

  16. Tane 16

    I also saw a capitalist, drowning a baby seal in oil.

    Was it Murray McCully? I’m sure I saw him doing the same thing last week…

  17. big bruv 17

    See this chaps?

    The Asia Pacific Democratic Union passed the following resolution on Tuesday in Sydney.

    That the Asia Pacific Democrat Union expresses its concern at the anti-democratic impact of the Electoral Finance Act 2007 in New Zealand which severely limits the rights of freedom of speech and expressions of opinion relating to valid political comments in the calendar year of an election.

    That is damning of the government. The APDU is part of the IDUand represents political parties from the following countries;

    Australia, Canada, Chile, El Salvador, Fiji, Korea, Mongolia, Nepal, New Zealand, Republic of China, Russia, Sri Lanka, and the USA.

  18. big bruv 18

    Tane
    Apr 23rd, 2008 at 8:11 pm
    I also saw a capitalist, drowning a baby seal in oil.

    Was it Murray McCully? I’m sure I saw him doing the same thing last week

    Nope, that would have been Helen Clark drowning kittens Tane.

  19. Tane 19

    It’s only funny the first time bruv.

    And the Asia Pacific Democrat Union is an association of right-wing political parties – that has about as much relevance as the Socialist International condemning the Employment Contracts Act.

  20. jon 20

    [lprent: deleted – way too far over the bounds. You have done better previously – just been looking at your comments]

  21. jon 21

    Deleting my comment is a bit rich—- given Big Bruvs comment I was merely demonstrating the association of a drowned kitten, to an wet infant cat and how that may be attractive to some people.
    We just had Simon Nome on kiwi blog telling us that there wasn’t censorship on this site,
    Maybe he was confused?

    [lprent: We don’t censor ideas. We do ban people for behaviour. We kill all spam that arrives here. Thats so there aren’t ads for viagra, porn,etc all over the site. Tell me what category I classed your comment in.]

  22. uroskin 22

    I’m intrigued by the graph indicating Danes are twice as happy as Hong Kong people even though they similar GPD/cap. I certainly know where I would prefer to live.

  23. Bruv:

    The Danish economy is highly unionised; 75% of its labour force are members of a trade union (compare this to 20% in NZ). Unions often have a day-to-day role in managing the workplace, and their representatives sit on most companies’ board of directors.

    Denmark has the world’s highest taxes on the workforce, and only to a minor degree from earmarked contributions (this is weird, if you believe the comments section at kiwiblog you get the impression that all taxes make people miserable). The most infamous tax is the registration tax imposed on private vehicles, approximately tripling the price by first adding 25% VAT to the import price of the vehicles and then 180% registration tax on top.

    http://en.wikipedia.org/wiki/Denmark

    It’s a true social democracy (as if there was ever any doubt).

  24. Phil 24

    One thing I haven’t seen covered in the analysis is motivation for happiness. Is it possible that some on lower incomes are equally happy to their wealthy compatriots because they get a perverse satisfaction out of seeing the wealthy pay excessive sums in taxation?

    That might go some way to explaining Denmark…

  25. Steve Pierson 25

    Phil. Yeah because all the happy people on minimum wage I know spend hours giggling at what your tax bill looks like.

  26. Phil 26

    It’s a well proven fact that an individuals satisfaction with their income is more correlated with ‘peer-group’ income than the individual level alone.

    As such, it doesn’t takle a great leap of faith to suggest that redistributive systems achieve bottom-end satisfaction not through the benefits directly accrued, but the penalties imposed upon the more successful.

  27. Stephen 27

    But the rich or quite-rich aren’t part of the lower income earners’ peer group..? I don’t know if it’s well proven, but I know the study you’re referring to, and I thought it applied to co-workers and friends, not ‘the other half’.

  28. randal 28

    what a weird little argument…people are happy when they are at one with themselves…not externally referencing themselves against others and the size and quantity of other peoples goods.

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