Money can buy one form of happiness, massive global study concludes

By Rob Stein
Washington Post Staff Writer
Thursday, July 1, 2010

Money, it turns out, really can buy you happiness -- or at least one form of it, according to the biggest study to examine the relationship between income and well-being around the world.

Pulling in the big bucks makes people more likely to say they are happy with their lives overall -- whether they are young or old, male or female, or living in cities or remote villages, the survey of more than 136,000 people in 132 countries found.

But the survey also showed that a key element of what many people consider happiness -- positive feelings -- is much more strongly affected by factors other than cold, hard cash, such as feeling respected, being in control of your life and having friends and family to rely on in a pinch.

"Yes, money makes you happy -- we see the effect of income on life satisfaction is very strong and virtually ubiquitous and universal around the world," said Ed Diener, a professor emeritus of psychology at the University of Illinois who led the study. "But it makes you more satisfied than it makes you feel good. Positive feelings are less affected by money and more affected by the things people are doing day to day."

Previous studies had suggested that money was associated with happiness. But the relationship appeared weak, and earlier work tended to focus on individual countries and global evaluations of life without parsing out the effects on specific positive and negative emotions or examining differences across nations.

The new survey -- the first large international study to differentiate between overall life satisfaction and day-to-day emotions -- makes that crucial distinction, allowing researchers to explore the elusive concept of happiness in much greater nuance.

"It's sort of a new era for the study of well-being," said Daniel Kahneman, a professor emeritus of psychology and public affairs at Princeton University.

The reason for the distinction is probably that when people are asked whether they are "happy," the first thing they do, wherever they are, is take stock of their lives by comparing themselves to their equivalent of "the Joneses" using the most obvious measure: income, several experts said.

"When people evaluate their life, they compare themselves to a standard of what a successful life is, and it turns out that standard tends to be universal: People in Togo and Denmark have the same idea of what a good life is, and a lot of that has to do with money and material prosperity," Kahneman said. "That was unexpected."

But day-to-day positive feelings depend a lot on other things, which also turn out to be fairly universal and therefore help clarify what makes people content, several researchers said.

"The thing I think is exciting about this is money can make you feel better in a limited way," said Barbara L. Fredrickson, a professor of psychology at the University of North Carolina at Chapel Hill. "But positive feelings like enjoyment and laughing can do a whole lot more for people. They can help people grow and learn and become a more resilient, better version of yourself."

The new survey, dubbed the "first representative sample of planet Earth," was conducted by Gallup and involved detailed questioning in 2005 and 2006 of 136,839 residents age 15 and older. The samples in each country were designed to be nationally representative and represent about 96 percent of the world's population.

"What makes this paper so important is the sample is so huge and covered the entire world," said Sonja Lyubomirsky, a professor of psychology at the University of California at Riverside. "It's really interesting that if you look at countries that are so different -- from rural villagers to people living in a city like Stockholm -- they are all about the same in terms of what makes people happy."

The researchers gathered information about a long list of attributes, including income, whether basic needs such as food and shelter were met, what conveniences the subjects owned and whether they felt their psychological needs were satisfied. The survey asked people to rate their lives on a scale from zero for the worst possible life to 10 for the best. They also reported whether they experienced enjoyment, smiling, laughing, sadness, depression or anger the previous day, whether they felt respected and had family or friends they could count on in an emergency, and how free they were to choose their daily activities, learn new things or do what "one does best."

Life satisfaction was directly and strongly correlated with income, with the impact felt equally among all ages, men and women, and rural villagers and urban dwellers in virtually every corner of the globe, the researchers reported in the Journal of Personality and Social Psychology. Although money also influenced emotions, the effect was much weaker. Both positive and negative emotions tended to be affected much more in relation to other psychological and social factors, such as feeling respected, having autonomy, strong social support and working at a fulfilling job.

"What we didn't know before is the extent to which life evaluation and emotional well-being are so distinct," Kahneman said. "When you look at the books about well-being, you see one word -- it's happiness. People do not distinguish."

The findings "are really significant" because "we are finally able to answer the big questions, such as 'What is a good society?' " Shigehiro Oishi, an associate professor of psychology at the University of Virginia, wrote in an e-mail. "If the goal of a society is to raise the daily enjoyment of its citizens, then, it seems critical to devise ways to increase the relational wealth of nations (e.g., stronger social network)."

© 2010 The Washington Post Company