Can Money Buy Happiness?

Money Boosts Life Satisfaction, but Not Necessarily Positive Feelings, Study Finds

From the WebMD Archives

July 1, 2010 -- All over the world, life satisfaction rises with income, but income is not necessarily highly correlated with positive feelings and enjoying yourself, new research indicates.

An analysis of findings from a study of 136,000 people in 132 countries also suggests that there is no single prescription for happiness, which depends on many factors, including local culture and expectations.

The findings from the data, gathered in the first Gallup World Poll, are published in the July issue of the Journal of Personality and Social Psychology.

“The public always wonders: Does money make you happy?” Ed Diener, PhD, professor emeritus of psychology at the University of Illinois and a senior scientist with the Gallup Organization, says in a news release. “This study shows that it all depends on how you define happiness, because if you look at life satisfaction, how you evaluate your life as a whole, you see a pretty strong correlation around the world between income and happiness.”

However, he says in a news release, “it’s pretty shocking how small the correlation is with positive feelings and enjoying yourself.”

Money, Happiness, and Satisfaction

The pollsters asked people questions on a wide range of topics, including whether their basic needs were met, what kinds of conveniences they owned, and whether their psychological needs were met.

Participants were also asked about positive and negative emotions experienced the previous day, whether they felt respected, had family and friends they could count on in an emergency, and how free they felt to choose their daily activities.

Diener says positive feelings are much more associated with factors such as whether they feel respected, have autonomy, and if their jobs are fulfilling.

“Everybody has been looking at just life satisfaction and income,” he says. “And while it is true that getting richer will make you more satisfied with your life, it may not have the big impact we thought on enjoying life.”

Among findings:

  • The United States had the highest income but ranked 16th in life satisfaction and 26th on positive feelings.
  • Denmark ranks high across categories. The country ranked No. 1 on life satisfaction, seventh on positive feelings, and fifth in income.
  • Extremely impoverished countries in Africa generally scored low on various categories, but no nation came in lowest in all types of happiness.
  • Israel ranks high on life satisfaction (11th) but much lower in positive feelings.
  • South Korea is a relatively wealthy country ranking 24th in income, but ranking 58th in positive feelings.
  • Some nations such as Costa Rica and New Zealand are happier than their income levels would suggest. Costa Rica ranks 41st in income but fourth in positive feelings, while New Zealand ranks 22nd in incomes but first in positive feelings.
  • Some mid-level countries such as Costa Rica do well and some like South Korea less well “in part because of the quality of social relationships,” Diener says in emailed responses to questions from WebMD.
  • Self-esteem is more important to happiness in the U.S. than in “traditional” cultures.


Poverty Does Not Mean Unhappiness

Diener says Danes are happier mainly for two reasons -- social trust is very high, and corruption is considered low. Also, people in Denmark are more satisfied with “their economic safety net” than people in the U.S., Diener says.

Also, factors that influence feelings of well-being vary from country to country, he says.

Diener says the study “clearly shows” that there is no single prescription for happiness.

Money, he says, no more guarantees happiness than cigarette smoking guarantees cancer, but they increase the chances.

In studies of poor people, researchers find that some are happy, in part because their needs are met.

“We have interviewed happy people in the slums of Calcutta and they can be relatively happy, although dissatisfied with their poverty, because they are rich in family and friends,” he says.

Money makes a bigger difference to happiness among poor people, but it takes a lot more additional money to change the happiness of a person who is well-off, Diener says.

Happiness by Country

Here is a list of rankings of selected nations on types of prosperity, out of 89:

Nation GDP/Capita Positive Feelings

United States 1 26

Denmark 5 7

Netherlands 7 3

Japan 14 44

Italy 18 67

Israel 20 61

New Zealand 22 1

South Korea 24 58

South Africa 35 29

Russia 36 79

Mexico 39 17

Costa Rica 41 4

Indonesia 59 24

India 61 63

Ghana 68 68

Nepal 76 50

Sierra Leone 87 87

Tanzania 89 52

WebMD Health News Reviewed by Laura J. Martin, MD on July 01, 2010



News release, University of Illinois.

Diener, E., Journal of Personality and Social Psychology.

Ed Diener, PhD, professor emeritus of psychology, University of Illinois; senior scientist, Gallup Organization.

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