Spring/Summer 2005

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Can we buy happiness? Will more wealth make us happier?

Few questions are older or tougher to resolve. Which is why we wouldn’t dream of trying to answer them for you. Instead, we’ll offer a few thoughts to get you started on finding your own answers.

Almost everyone agrees that it’s difficult, if not impossible, to be happy in a state of abject poverty. When you don’t know where your next meal is coming from, survival is a more immediate concern than happiness. “It’s a kind of spiritual snobbery that makes people think they can be happy without money,” is how author and existentialist Albert Camus put it.

But how much money? And is there a point after which the money won’t buy additional happiness?

One school of thought holds that the amount of money it takes to make us happy depends on how much wealth others have. Our level of wealth in absolute terms matters less than our ability to stay ahead of the Joneses. Economist Robert Frank observes that this is more or less the view H.L. Mencken took when he defined wealth as “any income that is at least one hundred dollars more a year than the income of one’s wife’s sister’s husband.”

Frank has a different take on the link between money and happiness. “Considerable evidence suggests that if we use an increase in our incomes, as many of us do, simply to buy bigger houses and more expensive cars, then we do not end up any happier than before,” writes Frank.

To support this view, he and others point to findings that “the average satisfaction level reported by survey respondents in Japan remained essentially unchanged between 1958 and 1986, a particularly striking finding in view of the fact that per capita income rose more than fivefold during that period.” In part, says Frank, that’s because we “adapt swiftly not just to losses but also to gains.” But he also contends that an increase in our absolute level of income can have an impact on happiness — depending on how we spend it:

If we use an increase in our incomes 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. The less we spend on conspicuous consumption goods, the better we can afford to alleviate congestion; and the more time we can devote to family and friends, to exercise, sleep, travel, and other restorative activities. On the best available evidence, reallocating our time and money in these and similar ways would result in healthier, longer — and happier — lives.

So, what’s the answer? Can we buy happiness or not?

When all is said and done, the answer just might be that no single answer applies to everyone. Some of us will be at our happiest when we’re out shopping to fill our oversized houses with more stuff — regardless of how hard we have to work to get it. (And we’ll really enjoy having the stuff, too.) Others of us will be at our happiest when we’re out for a weekend walk in the woods, content in the knowledge that we don’t need to spend our Saturdays working overtime in order to buy more stuff.