Can money buy happiness?

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According to foreign media reports, can money buy happiness? This eternal question has been discussed, but there has never been an answer. Rich people say that money can’t and can’t buy happiness. But people who are not so rich can’t help thinking that money can solve all their problems. Who is right and wrong?

Perhaps we can find the answer from the interdisciplinary field of economics, psychology and biology, behavioral economics. Behavioral economics is a study of how human and human psychology interact with money. So, how does behavioral economics explain the relationship between money and happiness?

How much money can make us happy?

Daniel Kahneman and Angus Deaton published a landmark study in 2010. Their study concluded that the appropriate amount of money to make a person feel comfortable and happy is $75000 a year. To reach this conclusion, they asked about 450000 Americans to rate their lives and incomes on a scale of 1-10 (1 for the worst and 10 for the best).

There are significant differences in people’s rating of income. Americans earning less than $75000 a year also score lower on happiness and are more likely to feel depressed under stress. However, with the increase of income, people feel less negative effects, and personal feedback is more positive.

A new study published in the journal Nature in 2018 updates the data for 2010. The researchers found that an annual income of $60000 to $75000 is enough to give a person emotional well-being. But only when their annual income reaches $95000 will they be truly satisfied with their lives.

In the 1940s, there was a theory called demand theory. This theory is consistent with the conclusion of Daniel Kahneman. According to the demand theory, the increase of money has the most significant positive effect when it allows people to meet their basic needs. These basic needs include adequate food, clothing, sanitation and shelter. Once these needs are met, the increased money will not have a significant impact on happiness. However, this may be because higher-level needs do not belong to the material category, but are more related to the sense of belonging, love, self-esteem and self-identity.

The more money, the happier

The more money you have, the happier you are, and to a certain extent, it is. Once beyond a certain range, the more money, the happier.

Let’s assume there are two people, Lao Li and Lao Wang. Mr. Li’s annual income was $50000, and Mr. Wang’s was $250000. Both of them received a $5000 bonus. As a result, Lao Li was happier than Lao Wang. The reason is that, after earning more than $95000 a year, the increased annual income no longer has a significant effect on improving the basic quality of life of individuals, because they have the ability to make themselves emotionally happy.

However, another theory has been proposed to explain why happiness does not increase when wealth exceeds a certain range, but decreases slightly. This theory is called adaptation theory. According to the adaptation theory, the increase of income will temporarily improve people’s happiness, but over time, people will get used to the life with higher income and increase their expectation. When people become accustomed to new income increases and pursue the next higher goal, disappointment may follow. In this way, people’s happiness will return to the previous level.

On the contrary, a study shows that experiential consumption is more likely to improve people’s psychological satisfaction than material consumption. Another study concluded that people with a higher sense of financial security are happier and therefore their higher-level needs are more likely to be met.

But this does not mean that a person will be unhappy if his income decreases. What is discussed here is the possibility that people are more likely to feel sad and stressed if their income is not high.

Another theory, social comparison theory, can also explain the relationship between money and happiness. Social comparison theory holds that people will compare their income and achievements with those around them. Therefore, if a person’s friends have a higher income, then the person may feel sad or disappointed in his own situation, leading to a decline in his happiness.

cultural difference

Research also shows that culture can affect happiness. Different cultures have different values. In a money culture, high income makes people happier.

For Europeans, the threshold for happiness is 27913 euros (about 35000 dollars), according to a study. This is a big gap with the happiness income of Americans. This is because a person’s culture, personality, growth and life experience will have an impact on their overall well-being. However, because everyone has different temperaments, it is difficult to accurately assess the impact of culture on one’s well-being.

The researchers have done similar studies in Turkey and other places. In Turkey, they found that local people are also happier when their income increases. But interestingly, the study found that women were less concerned about their material status or income levels than men.

summary

To study the relationship between money and happiness, we need to deal with a variety of gray areas. One of them is called the “focus illusion.”. When you ask participants to rate their happiness and income, you may also make them overestimate the happiness that money can buy.

Of course, our main question is, can money buy happiness? The answer is, of course, money can buy happiness, but the happiness money can buy is limited. Beyond a certain range, no amount of money can buy you the happiness you want. You can only improve your happiness through other ways. Or rather, it’s not how much you make, it’s how you spend it.

To live a decent life, to buy necessities and to live comfortably, and to obtain a certain degree of security and so on, these are inseparable from money. However, after meeting these needs, money can no longer buy happiness. In Mahatma Gandhi’s words, “everything in the world is enough to satisfy everyone’s needs, but not everyone’s greed.”.

Read more: Oxford University: research finds that when people are happy, productivity increases by 13%. Stanford University: research finds that money is the best way to quit smoking. Journal of the American Academy of Sciences: research shows that money can really make people happy. Cbndata: why do we love “magic woman”? NOAA: July 2019 found to be the hottest month on record Shanghai’s highest tuhu car maintenance: a quarter of Chinese auto users suffer from “low power anxiety” in 2018. Caixin Media & BBD: Yili consumption upgrade index report in May 2018 (download attached) WTW: 2017 global welfare status survey report (download) far better: insight into China’s consumer goods industry (download attached) ）International top magazine PNAs: people who love to make friends are more likely to live longer. Unacast: research shows that rich people fleeing New York cause about 34 billion dollars of income loss

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