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The price of happiness

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September 12, 2010

Princeton study shows that the perceived link between money and happiness is mostly an ill...

Princeton study shows that the perceived link between money and happiness is mostly an illusion

Money won't make you happy, or at least, not as happy as you might think. A study by Princeton University researchers has shown that the link between earning more money and day-to-day happiness is a tenuous one – and extra dollars in your pocket doesn't necessarily translate to spending more time doing the things you enjoy.

The study was conducted by Princeton professors, economist Alan B. Kruger and Nobel laureate and psychologist Daniel Kahneman, along with with psychologists David Schkade of the University of California-San Diego, Norbert Schwarz of the University of Michigan and Arthur Stone of the State University of New York-Stony Brook.

The research team approached the study with an alternate way of looking at well being, largely focusing on surveying people’s actual life experiences as opposed to their own judgments of their life.

"The belief that high income is associated with good mood is widespread but mostly illusory," the researchers wrote in the June 30 issue of Science. "People with above-average income are relatively satisfied with their lives but are barely happier than others in moment-to-moment experience, tend to be more tense, and do not spend more time in particularly enjoyable activities."

The researchers developed an “enjoyment scale” whereby people were asked to record their day’s activities, along with emotions and feelings in a diary format. This Day Reconstruction Method (DRM) was used in a 2004 study of 909 employed women from Texas.

The new study looked at data from three major surveys; the 2004 study, the 2005 study of 810 women from Ohio and the nationwide Bureau of Labor Statistics survey.

The 2004 study found that most of the women surveyed believed that those who earned less than $20,000 per year would spend 32 percent more of their time unhappy opposed to those earning above $100,000 per year. However the results of the study highlighted that those earning less than $20,000 were only 12 percent more unhappy than the higher income bracket.

The 2005 study illustrated that income had little effect on an individual’s happiness from moment to moment. "If people have high income, they think they should be satisfied and reflect that in their answers," Krueger said. "Income, however, matters very little for moment-to-moment experience." The government statistics highlighted that men earning less than $20,000 per year spent 13.6 percent more time on leisurely activities than those men in the $100,000 plus income bracket.

Similarly women earning less than $20,000 spent 13.9 percent more time on leisurely activities than the women in the higher income bracket.

About the Author
Bridget Borgobello Bridget is an experienced freelance writer, presenter and performer with a keen eye for innovative design and a passion for green technology. Australian born, Bridget currently resides in Rome and when not scribbling for Gizmag, she spends her time developing new web series content and independent cinema.   All articles by Bridget Borgobello
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6 Comments

Man I don't know who these people they surveyed were? I was INFINITELY happier when I was making nearly 6 figures a year than I am now at less then 30K U.S. a year! Back then I didn't have to worry about making my bills or if I wanted to fix or replace something, I traveled (unlike I do now) and I was a very grateful person at that level and now? I'll be honest it's kind of sucky right now! I know that money isn't the end all be all in this life but since we all use it and need it for the most part it does help to have some sort of reserve and to just live hand to mouth is no way to live, I am lucky that I owe nothing to any one but I am working for the day that I can relax again with a higher income than stress at such low levels like I do now. I just don't get this study?

mrhuckfin
12th September, 2010 @ 01:07 pm PDT

I think you missed the point mrhuckfin. The studies didn't address people who were disgruntled after losing a lucrative job for a low paying one. It addressed people who didn't know any different, either way. Of course people who made a lot of money that now have to survive on lower wages will not be happy. However, if you have grown accustomed to the lower wage lifestyle and are happy with you life, there is nothing wrong with that. I know many people in both categories and their happiness is not based on the same things, yet they are all very happy. The real problem is when people let jealousy of others run their lives that we become unhappy.

SteveO
13th September, 2010 @ 10:55 am PDT

Money may not make your "happy", but it *WILL* make you *HAPPY-ER* and that is a very important "ER"

Ed
13th September, 2010 @ 04:22 pm PDT

SteveO and Ed Both good points! :-)

mrhuckfin
13th September, 2010 @ 09:06 pm PDT

Would like to understand coorelation with work hours. When I hear 20K I think under employeed or part time employeed and so think of a more appropriate headline might be: "Folks who don't work a lot have more time to goof off"

Mr. Jim
15th September, 2010 @ 04:51 pm PDT

I'm with you mrhuckfin. Never had much money, but it's a LOT of stress and fear and worry when you're only making 30k or less. Especially with a family. No medical insurance, no car insurance, car falling apart, and if you took the advice of my parents, no credit because you never got a credit card, so no buying a new car on time etc. Your entire life hangs in a constant balance where any significant mishap will bring the whole thing crashing down. Whether money makes one "Happy" in excess I neither know, nor care, but money, enough to afford what you need on the other hand provides security, and I don't think anyone can be as happy if they lack security than they can be if they have security. At least Some. Just my two cents.

Kira Elliott
30th April, 2012 @ 07:06 pm PDT
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