Money Buys Happiness

Two economists claim that money buys happiness. But if money buys happiness, and money pays your taxes doesn't that mean that paying your taxes should make you happy. Looks like two more smart people are actually not so much. Find out how you can cure depression with a giant wad of cash.

Most of us don’t get our kicks out of attaching a R100 note to a fish hook and some line, then lowering it down a building and suddenly yanking it away whenever an excited homeless person tries to grab it (shame on you Marcus Stelloh). But most of us do get some form of happiness from having more money than others.

At least this has been the consensus since a 1974 study by Richard Easterlin was published. However, the study had some unexpected results known as the Easterlin Paradox.

To sum up the three observations:

1. Within a society, rich people tend to be much happier than poor people.
2. But, rich societies tend not to be happier than poor societies (or not by much).
3. As countries get richer, they do not get happier.

This little bit of information made the relationship between financing and happiness a relative statistic. Thus, it did not matter if you had less than those in other countries because all that mattered was that you were richer than those around you.

This little paradox has been exploited by the press, hippies and a couple of munchkins to illustrate that money doesn’t buy happiness. As opposed to the fact that people are superficial and want to be number one in their space.

However, now an Aussie with a ponytail and an American who hardly ever blinks have disputed the Easterlin Paradox. There new study basically observes the following:

1. Rich people are happier than poor people.
2. Richer countries are happier than poorer countries.
3. As countries get richer, they tend to get happier.

This is pretty groundbreaking because as anyone who reads the Bible knows, Esterlin is infallible and if the new research, from Wolfers and Stevenson, is accepted by the greater economic community it would prove him wrong – undoing all creation and effectively ending all life (that might be wrong but it’ll sell newspapers).

Wolfers and Stevenson claim that the new findings are due to errors in collecting data among countries.

I, however, am not so convinced, although I’m sure the press will mount this like Paris Hilton to ‘any moving object’. Of course I haven’t read the whole study yet (it’s over 70 pages and I’ve known about it for an hour) but from what I can assess is the following:

• This is what I’d call a meta-study based on large quantities of different studies that are not standardized whatsoever. Meaning that the generalization of the findings is problematic.
  
• The world has changed in the last 30 years and there is far more global awareness. People in poor countries probably know more now about the better living conditions of their foreign counterparts than before. Meaning the study might not have taken the trend of globablization into account, which might make it as though we are living in the same country (it’s a small world after all).
  
• There is no proof that the people conducting the surveys weren’t using candy to sway the results.

Look how unhappy us South African’s are: