It’s a question that has puzzled and confused us for centuries. Can money buy happiness? Would more money make us happier? It’s a question that fascinates, and divides psychologists worldwide.
A survey conducted in 2010, concluded that money does make us happier, but only to a certain point. Psychologist Daniel Kahneman and economist Angus Deaton, from Princeton University, showed that levels of well-being increased with salary up to a limit of about $75,000 a year. But beyond that, increasing amounts of money had no further effect on happiness.
However, a more recent study, conducted by researchers from the University of Michigan in 2013, challenged the above idea. After comparing life satisfaction and happiness levels in both rich and poor countries, and rich and poor people within a country, the researchers concluded – ‘The relationship between well-being and income does not diminish as income rises. If there is a satiation point, we are yet to reach it.’
Although the above research suggests that happiness could be bought with money, when Markus Persson, creator of Minecraft, sold his company to Microsoft for £2.5bn in 2014, it didn’t give him the huge happiness boost that people would expect, in a tweet from August 2015, he says “Hanging out in Ibiza with a bunch of friends and partying with famous people, able to do whatever I want, and I’ve never felt more isolated.”
Some would argue that money couldn’t be the only source of happiness for people. According to some researchers, income levels account for just 10% of our total reported happiness. State of mind and ‘intentional activities’ are the biggest sources of individual happiness.
Studies also show that being generous also makes us happy. In other words, spending money on others is also linked to our well-being.
Researchers at the National Institute of Health – U.S.A, showed a link between giving and activation in the part of the brain responsible for pleasure, triggering the release of endorphins or ‘happiness hormones’, which cause what scientists refer to as the ‘helper’s high’.
So does money actually make us happier? Well, yes and no. We all need money to take care of basic necessities and a rise in our income can definitely improve our wellbeing, but our major source of happiness is the people and relationships in our life and our state of mind. Perhaps it is more about the way in which we choose to spend our money.