The banks and brokerage firms are probably consoling themselves these days with the old adage “money can’t buy happiness” since they no longer have any. Of course, that saying has been around since well before the current fiscal shocks, and it has spawned an odd little offspring of social science called “happiness economics”.
Not content to take their mothers’ word for it that money can’t buy happiness, the sociologists and psychologists and economists in this field do studies — lots of studies, it turns out — to determine whether there is a correlation between a light heart and hard cash.
A 1971 research project postulated something called the “hedonic treadmill”, the concept that if we earn more money but our neighbors do too, then we’re not going to be any happier than we were before. The treadmill aspect is that no matter what we have, we continually aspire to still more. Who funded this study? Had they never heard the expression, “keeping up with the Joneses?”
A 1974 “happiness study” came up with a variation on that idea, known as the Easterlin Paradox. The general idea is that once people have enough resources to cover life’s basic necessities, increases in income didn’t make them happier, it just re-set the bar for wanting more. In other words, once you get that 42″ flat screen TV you’d been craving, now you won’t be happy until you get a 56″ flat screen (on which to watch the same boring re-runs).
A couple of University of Pennsylvania economists made news in 2008 with the findings of their research project which basically said, “Yeah, money can buy you happiness.” In this study, only 42% of households with income below $30,000 called themselves “very happy”, while 90% of households making at least $250,000 gave that answer. I’m not sure about the methodology of the study, but it seems to me that a rich guy thinking “I’m glad I’m not that poor bastard” isn’t necessarily the same thing as actually being “very happy”.
The most recent study to see if there’s any truth to the old adage was presented this month by a group of researchers at San Francisco State University. Their findings might be summarized as “money can buy happiness, if you spend it wisely.” Buying experiences, according to lead researcher Prof. Ryan Howell, generates more happiness than buying material things. Life experiences like vacations, going to the theater or renting a sailboat were cited as examples. “We don’t tend to get bored of happy memories like we do with a material object,” Professor Howell said, suggesting that memories are, in a sense, a return on the original investment.
What all of these studies lack, as far as I’m concerned, is a satisfactory definition of “happy”. How can a social scientist possibly quantify happiness? It is by definition subjective — my happiness might be your hell, and vice versa — so how do they measure it objectively?
Whatever it is, maybe Leo Rosten got as close to the truth as any of these research studies: “Money can’t buy happiness, but neither can poverty.”