Maybe money really can buy happiness

Can money buy happiness? Maybe it can! Consider these articles from The Economist:

"Where money seems to talk"
http://www.economist.com/world/international/PrinterFriendly.cfm?story_id=9475891

"The rich are different from you and me—and they say they are happier."

The old theory was: "Rich countries might be happier than poor ones, but beyond a threshold, the connection weakens, and more cash would not buy more happiness—so the theory goes."

"The new polls cast some doubt on that school of thought. They add weight to the contention that growth and income play a big part in boosting people's satisfaction with life and their attitude to the future."

"As Angus Deaton of Princeton University puts it, a map of the results looks like an income plot of the world ..."

"But in general, declared levels of happiness are correlated with wealth. The pattern also seems to hold true within countries, as well as between them. Rich Americans are happier than poor ones; rich Brazilians happier than poorer ones."


"Comparing countries: The rich, the poor and Bulgaria"
http://www.economist.com/node/17722557?story_id=17722557

Why is this article interesting? It is interesting because it questions whether the relative wealth or absolute wealth is more important.

"Mr Easterlin suggested that well-being depended not on absolute, but on relative, income: people feel miserable not because they are poor, but because they are at the bottom of the particular pile in which they find themselves.

"There are now data on the effect of income on well-being almost everywhere in the world. In some countries (South Africa and Russia, for instance) the correlation is closer than in others (like Britain and Japan) but it is visible everywhere.

"The variation in life satisfaction between countries is huge (see chart). Countries at the top of the league (all of them developed) score up to eight out of ten; countries at the bottom (mostly African, but with Haiti and Iraq putting in a sad, but not surprising, appearance) score as low as three."

What does it mean? It means that absolute wealth matters. It is not just one's relative position in his or her society but the absolute amount of wealth.


Or, another possibility (and I'm surprised that these articles didn't consider this): Information changes everything. Once upon a time a poor person in a poor country who happened to be better off than his neighbors might have felt quite happy. But nowadays, with global communications reaching the furthest corners of the world, that same person realizes how little he has compared to the average person around the world. So he doesn't feel as happy as he once might have. So perhaps the original hypothesis (relative perception of wealth is what matters) still holds true, but the frame of reference has changed. People compare themselves to others around the world rather than own region.