Can Money Buy Happiness? Economic Intrigue

The long-term history of mankind is a paradox that, although many are much happier than the poor within the country, at any time, average happiness levels change very little as people's income increases with time. Happiness is the key question of our lifestyles, religions and societies. It can be argued, in fact, that all that we have finally conquered, and increase happiness.

Happiness is also a key tenet of economic science: changes in income levels for measurement of-a-vis the changes in levels of happiness have been interpreted to mean that happiness depends on relative rather than absolute income. However, another interpretation is true, that happiness is a benefit that could be expected to result from growth in absolute income have not materialized because, as people in rich societies generally spent their incomes.

Considerable experience shows that if we use our income increased, as many of us simply buy bigger houses and expensive cars, then we do not end up any happier than before. But if we use our income to increase to buy more of certain inconspicuous goods - such as freedom from a long commute or a stressful job - then the evidence paints a very different picture. We spend less conspicuous consumption goods, the better we can afford to alleviate congestion and can be more time for family and friends to enjoy, sleep, travel, and other restorative activities. The best available evidence, reallocating our time and money on these and similar ways to create a healthier, longer and happier-lives.

In this case, it is Japan, which was a very poor country in 1960. Since then and until the 1980s, its per capita income has increased nearly fourfold, to the extent of the highest in the industrialized world. However, the average happiness level reported by the Japanese was not higher in 1987 than in 1960.They had a lot more washing machines, cars, cameras, and other things like they used to, but they were not very significant gain happiness scale. The same pattern appears regularly in other countries as well, and the puzzle for economists. If increasing income does not allow people happier, why do they go to such lengths to get more income?

It turns out that if we measure the income of happiness relationships or otherwise, we get what economists suspected all along. When we plot average happiness compared to the average income for clusters of people in a given country at some point, we see that rich people are in fact much happier than poor people. Evidence therefore suggests that if income affects happiness, it is relative, not absolute income that matters. Some social scientists have pondered the significance of these models came to the conclusion that, at least the people of the richest countries in the world, serves no useful purpose is served by further accumulations of wealth. On its face, this should be surprising finding, because there are so many supposedly useful things that having additional assets would allow us to do so. It is indeed independent evidence that having more wealth would be nice if it was spent in certain ways. The main insight of this evidence, although we seem to quickly adapt to the trans-board increases in our stock the most tangible goods, there are specific categories that our ability to adapt is more limited. The additional costs of these categories showed that the greatest potential to produce significantly improved well-being.

Human ability to adapt to dramatic changes in life circumstances is impressive. We quickly adjust the loss, as well as profits. Advertising provincial lottery contestants fantasizing about how their lives would change if they won. People who really won the lottery usually notified of the expected rush of euphoria for a few weeks after their happiness. Subsequent studies were carried out after a few years, however, shows that these people are often happier - and indeed, there are several ways less happy - than before. In short, our special mandate to harmonize, it seems, helps to explain why the absolute life just do not matter much when we are to escape poverty, physical deprivation. This interpretation is consistent with testimony of people who have lived or traveled abroad, who report that the struggle to get ahead, it seems to play a very similar psychological effects in rich societies as in those with more modest levels of wealth.

So, therefore, the economic answer whether money buys happiness, with a negative issue. The evidence described above suggests that satisfaction by many forms of conspicuous consumption is more context than the satisfaction of providing much less visible forms of consumption. If so, this would explain why the absolute increase in income and consumption in recent decades have not been translated into corresponding increases in measured well-being.