Abstract
The relationship between money and happiness is surprisingly weak, which may stem in part from the way people spend it. Drawing on empirical research, we propose several principles designed to help consumers get more happiness for their money. Specifically, we suggest that consumers should (1) buy more experiences and fewer material goods; (2) use their money to benefit others rather than themselves; (3) buy many small pleasures rather than fewer large ones; (4) spend more time with their families; and (5) shift to enjoyable activities. Scientists have studied the relationship between money and happiness for decades and their conclusion is clear: Why doesn’t a whole lot more money makes us a whole lot happier? One answer to this question …show more content…
Mass media has popularized the finding that there are positive but diminishing returns to income. In other words, increases in income cause happiness to grow only up until a certain point, the point at which basic needs are met. Above this point, increased income does not contribute to more happiness. Well, the story is slightly more complicated than that. Studies have shown different results when they studied logarithmic changes in income rather than changes in the absolute dollar amount (Happiness, pleasure, and judgment 1995). When plotted logarithmically, life satisfaction does indeed rise proportionally with income. Furthermore, people who are deeply invested in the importance of money and material possessions score lower in both emotional well-being and life …show more content…
If you have, you probably pictured them lounging on the deck of a yacht, taking a private jet to some exotic tropical location, or bathing in hot springs somewhere in the Iceland. Reality, however, is something very different. People don’t shift to enjoyable activities when they’re rich. People who earn more money don’t spend their time enjoying themselves; they spend their time at work, in activities likely to cause them more stress and tension. This may be because of “the focusing illusion” (Proceedings of the National Academy of Sciences, 105, Page 1050). When people think about earning more money they probably imagine they would use the money on recreational activities. In fact, to earn the money, they have to spend more time at work, and commuting to and from
The relationship between money and happiness is surprisingly weak, which may stem in part from the way people spend it. Drawing on empirical research, we propose several principles designed to help consumers get more happiness for their money. Specifically, we suggest that consumers should (1) buy more experiences and fewer material goods; (2) use their money to benefit others rather than themselves; (3) buy many small pleasures rather than fewer large ones; (4) spend more time with their families; and (5) shift to enjoyable activities. Scientists have studied the relationship between money and happiness for decades and their conclusion is clear: Why doesn’t a whole lot more money makes us a whole lot happier? One answer to this question …show more content…
Mass media has popularized the finding that there are positive but diminishing returns to income. In other words, increases in income cause happiness to grow only up until a certain point, the point at which basic needs are met. Above this point, increased income does not contribute to more happiness. Well, the story is slightly more complicated than that. Studies have shown different results when they studied logarithmic changes in income rather than changes in the absolute dollar amount (Happiness, pleasure, and judgment 1995). When plotted logarithmically, life satisfaction does indeed rise proportionally with income. Furthermore, people who are deeply invested in the importance of money and material possessions score lower in both emotional well-being and life …show more content…
If you have, you probably pictured them lounging on the deck of a yacht, taking a private jet to some exotic tropical location, or bathing in hot springs somewhere in the Iceland. Reality, however, is something very different. People don’t shift to enjoyable activities when they’re rich. People who earn more money don’t spend their time enjoying themselves; they spend their time at work, in activities likely to cause them more stress and tension. This may be because of “the focusing illusion” (Proceedings of the National Academy of Sciences, 105, Page 1050). When people think about earning more money they probably imagine they would use the money on recreational activities. In fact, to earn the money, they have to spend more time at work, and commuting to and from