The relationship between money and happiness is a topic of considerable debate among researchers and scholars. While it is true that money can provide access to resources and opportunities that contribute to well-being, the extent to which it directly correlates with happiness is nuanced and multifaceted.
Diminishing Returns:
Studies have shown that while money can indeed increase happiness up to a certain point, this effect tends to diminish once basic needs are met. Once individuals have enough income to cover their basic necessities such as food, shelter, and healthcare, (Maslows Hierarchy of Needs), additional income may have diminishing returns in terms of increasing happiness (Kahneman & Deaton, 2010). This phenomenon, known as the "hedonic treadmill," suggests that people quickly adapt to increases in income and seek even higher levels of wealth to maintain their level of happiness.
Relative Income:
Another factor to consider is the role of relative income in shaping happiness. Research has found that people often compare their income and material possessions to those of others, leading to feelings of envy, insecurity, and dissatisfaction (Clark & Oswald, 1996). In societies with high levels of income inequality, individuals may feel pressured to keep up with societal standards of success and material wealth, which can undermine their sense of well-being.
Beyond Material Wealth:
It's important to recognize that happiness is influenced by factors beyond material wealth. Positive relationships, meaningful work, a sense of purpose, and a supportive community are all critical contributors to happiness and well-being (Diener & Seligman, 2002). While money can facilitate access to some of these factors, it is not a guarantee of happiness in and of itself.
While money can play a role in facilitating happiness by providing access to resources and opportunities, its impact on overall well-being is complex and contingent on various factors. Once basic needs are met, the relationship between money and happiness becomes less straightforward, with other factors such as relative income, social comparisons, and non-material sources of well-being playing significant roles. Ultimately, achieving happiness involves a multifaceted approach that extends beyond monetary wealth to encompass meaningful relationships, personal fulfillment, and a sense of purpose and belonging.
References:
Clark, A. E., & Oswald, A. J. (1996). Satisfaction and comparison income. Journal of Public Economics, 61(3), 359–381.
Diener, E., & Seligman, M. E. P. (2002). Very happy people. Psychological Science, 13(1), 81–84.
Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences, 107(38), 16489–16493
Killingsworth, Matthew A. "Experienced well-being rises with income, even above $75,000 per year." Proceedings of the National Academy of Sciences 118.4 (2021): e2016976118.
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