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Many societies believe that money does not buy happiness. However, others affirm the contrary belief by saying that income levels affect people’s happiness. Before delving into the details of these perceptions, it is important to understand that happiness is an emotional or mental state where people experience more positive than negative feelings. These feelings outline how people interact with different stimuli, such as income, to influence their happiness. People experience different emotional effects through such stimuli. The positive and negative effect refers to the effects that varying income levels have on people’s feelings and emotions. In detail, a positive effect refers to the extent that a person experiences positive moods (such as joy and interest), while negative affect refers to negative emotions (such as anxiety, sadness, and depression) that most people experience from varying income levels.
Using the above definitions, happiness, and emotional outcomes, Kesebir and Diener (117) say unsurprisingly different researchers have investigated the relationship between happiness and money. Indeed, many societies believe that life is not about (merely) living, but living a fulfilling and happy life (quality life). This realization has caused many philosophers to explore different ways of rising above the mere existence of life to a more fulfilling purpose of living.
Comprehending the motivations for pursuing money and happiness is the key to understanding this correlation. In this paper, I argue that wealthy and poor societies have different relationships between money and happiness. In detail, after exploring different types of correlation between the two variables, I explain that the relationship between both variables is strong in low-income societies, but it gradually weakens as income increases (especially in wealthy societies). Based on this understanding, money affects happiness to a limited extent. Indeed, beyond the satisfaction of basic human needs, other non-monetary factors, such as social relationships, have a more significant correlation with happiness than money does.
Positive Correlation between Happiness and Money
The positive correlation between money and happiness mainly exists in low-income societies. The utilitarian philosophies of the modern era affirm this relationship (Kesebir and Diener 117). However, their influences stem from common beliefs in the 19th century (and beyond), which equaled happiness to utility (utility refers to the ability of material possessions to satisfy human needs and wants). Using the relationship between happiness and utility, many medieval societies believed the latter was equal to human pleasure (Kesebir and Diener 117). Jeremy Bentham and Aristotle (among other philosophers) supported this view by saying that most people should strive to experience more pleasure than pain (as a measure of their happiness) (Kesebir and Diener 117). They also argued that different societies should use this basis for understanding morality and legislation (Kesebir and Diener 117).
As many societies embraced this idea, the medieval conception of happiness, as a function of virtue and perfection, disappeared (Kesebir and Diener 117). People started to see material possessions as more important than gaining respect from society (by practicing good morals and virtues). Similarly, this ideological shift made it uncommon for many people to focus on issues of human well-being (human well-being closely associates with happiness because it refers to a state of health or prosperity) (Kesebir and Diener 117). Therefore, their focus shifted to material possessions as a measure of happiness.
In line with the above argument, Aristotle argued that wealth was an important requirement for happiness. Easterlin (3) shared the same view by explaining America’s perception of happiness. He said many US citizens perceived happiness through “material” lenses. The Easterlin (3) paradox summed this view by showing that income had a direct correlation with happiness. It based this argument on several cross-national studies, which showed that rich people were happier than poor people were. For example, in a 1970 American study, Easterlin (4) found out that less than one-quarter of low-income people believed they were “happy” people. Comparatively, about double this number of respondents (in the high-income group) said they were happy. The same findings appeared in more than 30 similar researches conducted in other parts of the world. Although the same study established a correlation between happiness and education, health, and family relationships, income emerged as having the strongest and most consistent relationship with happiness (Easterlin 4).
Although Easterlin (3) used the above findings to support the correlation between income and happiness, he said increasing everybody’s income weakened the correlation between both variables. Therefore, income variations affected people’s perceptions of happiness (people always judge their happiness based on what their peers think of them). Lane (57) supported these views when he said that most people often adjusted to a new standard of measuring their happiness whenever they increased their income levels (the desire for money tapers off as income increases). Using this analogy, Easterlin (5) believed that wealthy nations were no happier than poor nations. Based on the same logic, he said that people’s subjective perceptions of happiness depended on their welfare perceptions (Easterlin 5).
Therefore, as opposed to perceiving their happiness through “material” lenses, they did so by understanding how it compared to their social norms. Consequently, people who are above the “norm” feel happier than those who are below it (how people perceive the social norm depends on the economic well-being of the society).
Although Easterlin (5) argued that happiness was subjective to the national income (as shown above), researchers who have conducted studies that are more recently told that the correlation between happiness and well-being was stronger than his paradox showed. Consequently, they revised this model by saying that increased national income affected the overall sense of individual well-being in a country. Unlike the data relied on Easterlin (4), researchers established the above fact, using findings that are more reliable. For example, Lane (56) quoted the findings of a 1976 transnational study, which showed that a nation’s poverty index affected the well-being of its citizens (such as people’s attitudes, feelings, and perceptions). These studies showed that personal satisfaction increased with increased levels of economic development (money “bought” happiness).
Insignificant Correlation between Happiness and Money
Money has an insignificant correlation with happiness in wealthy societies. This is an old view of this relationship because philosophers from ancient Greece started exploring this insignificant correlation in 370 BC (Kesebir and Diener 118). They said material wealth had an indirect correlation with happiness. Based on this understanding, they believed that a man’s mind defined his level of happiness. Similarly, they believed it was difficult for people to be happy if they lacked morals and virtues (money was not a priority). Democritus and Epicurus (two ancient Greek philosophers) mainly advanced this view (Kesebir and Diener 118).
Similarly, other ancient Greek philosophers, such as Socrates and his student, Plato, refuted the claim that happiness depended on the “enjoyment” of beautiful and good things. They believed that all people needed to show prudence and honor to be happy (Kesebir and Diener 118). Lane (56) has also reported the same findings after analyzing the relationship between money and happiness in a contextual approach. Like, Easterlin (3), he said in many developed countries, money did not increase happiness levels. Frank Andrews and Stephen Withey (cited in Lane 58) also supported these findings when they said that different socioeconomic groups showed small differences in people’s well-being. They also said that income levels had an insignificant impact on life as a whole.
The above findings show the different correlations between income and happiness. However, I believe this limited correlation mainly emerges in wealthy societies, as opposed to low-income societies. For example, non-monetary issues have a strong correlation with happiness in wealthy societies. Economists also affirm this fact through the Maslow hierarchy of needs because they say people crave for higher-level needs, such as love, social relationships, and recognition after they have met their primary needs such as food, shelter, sex, and clothing. Since many people in wealthy societies do not struggle to meet basic human needs, the insignificant correlation between happiness and money applies to this group of people.
Some philosophers maintain a “middle ground” by supporting the limited influence of money on happiness. Epicureans also supported this view because they said wealth was important to people’s happiness, to the extent that it gave people their basic needs, like shelter and clothing (Kesebir and Diener 118). However, beyond this threshold, it had an insignificant relationship with happiness. This analysis affirms the different correlations between happiness and income across poor and wealthy nations. Indeed, Kesebir and Diener 117) say there is a strong correlation between happiness and income in low-income countries, while wealthy economies experience an insignificant correlation between the two variables. A comparative study conducted in America revealed that the wealthiest Americans (profiled in Forbes) were only modestly happier than middle-income and low-income control groups that lived with them in the same location (Lane 58).
Based on the above analysis, income is not the only variable that affects happiness. Non-monetary issues affect happiness too. Lane (58) supports this argument by highlighting the need to distinguish individual pleasures from human well-being issues. Individual pleasures may depend on income, but people’s well-being is subjective. Therefore, besides income, other factors affect people’s happiness. To support this view, Lane (58) cited a 1982 study (conducted by Gallup), which asked Americans what made them happy (Lane 58). The respondents said family relationships made them happier than money did. Other things that made them happy included television, friends, reading books (and other pleasures) that most people from low-income families could afford (Lane 57).
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Therefore, income does not solely define happiness. This analysis shows that although most people need to have adequate money to be happy, money, in isolation, is not sufficient to guarantee happiness, beyond providing basic needs. In the book, Happy People, Jonathan Freedman (cited in Lane 57) affirmed the above fact by saying that rich and poor people have different perceptions of the role of wealth in increasing people’s happiness levels. Overall, while many rich people understand that wealth does not automatically guarantee happiness, people from low-income societies believe it does. This was similarly true for their perceptions of well-being. Therefore, when a person is extremely poor, money looks like a “savior” of some sort, but as income increases, this idea disappears. This analogy has stronger merit than the general perception that money “buys” happiness. Indeed, not all happy people are rich. In this regard, many human societies have focused so much on material wealth that they have forgotten. It does not guarantee happiness.
After weighing the findings of this paper, easily, a person could affirm an indirect relationship between happiness and income. Some researchers say money has a direct relationship with happiness, while others do not affirm this relationship. This inconsistency stems from the contextual appeal of income and wealth to human societies. For example, income has a weak correlation with happiness in wealthy societies. However, this relationship is stronger in low-income societies. Evidence also shows that there was a weak correlation between income and happiness in medieval societies because many people believed adhering to human virtues made people happy (this was the medieval standard for happiness).
However, the modern era changed this perception and shifted the societal focus from virtues and morals to material wealth. Now, people attach more value to income and similar “material” factors. However, as changes to the Easterlin (3) paradox suggest, wealth increases happiness to a limited extent. Overall, this paper shows that income and happiness have a “contextual” relationship. For example, if there is a broad increase in income across a nation, this correlation weakens (the Easterlin (3) paradox mainly supports this view); however, as income levels decrease, the correlation strengthens. Consequently, there is a strong correlation between money and happiness in low-income societies. In wealthy societies, non-monetary factors like health and the quality of family relationships have a stronger impact on happiness than money does.
Easterlin, Richard. “Does Money Buy Happiness?” Public Interest 30.3 (1973): 3-10. Print.
Kesebir, Pelin and Ed Deiner. “In pursuit of happiness: Empirical Answers to Philosophical Questions.” Perspectives on Psychological Science 3.2 (2008): 117-123. Print.
Lane, Robert. “Does Money buy Happiness?” Public Interest 113.3 (1993): 56-65. Print.