Wednesday, March 9, 2016

Can money buy happiness?

Here is what I take away from this summary:
  • There is a strong positive correlation between money and happiness.  
  • However, it is not clear that the correlation is causal.  It could be, for example, that healthy people living meaningful lives are both happier and wealthier than others.  These "other factors" could be causing the correlation.
  • If the correlation is causal (from money to happiness), then money has diminishing marginal returns to happiness.  This has a clear implication for giving:
Giving money to someone living on $1,000 per year in the developing world will do far more to improve their lives than giving $1,000 to someone earning $25,000. The correlations above suggest that it’s about 25 times more valuable. If you want to help people, this is a major reason to focus on international poverty rather than helping the relatively poor in richer countries.

8 comments:

  1. Money in the grand scheme of things seems to be a driving force as to why people aim to improve themselves financially because it is needed to buy both needs and wants. Money is needed to buy necessities such as food and shelter, but it is also needed in order to buy luxury’s such as cars and jewelry which may be of importance for some. Money provides people an opportunity to do things that are not needed for normal everyday existence and to some money does create happiness. For others, people are able to get by and be happy without money as the main overall factor in order to be happy and content. I do agree that the more money you make; the more money you need to maintain that lifestyle. This has been shown to be true with CEO’s who have success but then due to either economic collapses or firings loss the salary they once enjoyed it is hard to adjust to a new lifestyle when making less after such success.

    Looking at the example given where giving money to someone in a developing country who makes $1000 a year is likely to improve their lives more than someone earning $25,000 and getting the same $1000, I believe is misleading and largely based on the environmental and economic factors of the nations than anything else. To provide my own example, someone making $25,000 in a developed country is likely not afforded many luxuries and is more than likely struggling. Putting it into scale and offering that person making $25,000 the equivalent of double their salary would surely provide an extreme level of happiness compared to someone in a developing country making $1000 getting $1000. The person in a developing country who is having their salary doubled is going to offer them opportunities because $1000 in their nation will more than likely go further than in a developed nation. Someone making $25,000 and getting an extra $1000 is likely to go unnoticed and be applied to necessities. I am sure the level of happiness for that person making $25,000 will increase because it is extra money in their pockets, but those funds are more likely going to be applied to needs rather than wants.

    The notion that if you want to help people, we should focus on international poverty rather than the poor in richer countries is not one I agree with. I do understand and do agree with philanthropy however I do have a hard time digesting that the poorer demographic in richer countries are not worthy of being offered such a benefit when compared to developing countries. That is not to say that giving to poorer countries is not right, but I think someone who is giving money to help are looking to help people in general. Lastly, I do want to stress again that because we are looking at the strength of the money given to the population in both developing and developed countries, we need to put the comparison to scale in that with the $1000 example, we are doubling the developing countries salary compared to a developed country salary. In a developed country, expenses are higher, wages are higher and the money to needed to live are higher.

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  2. To be honest money can bring happiness to certain extend, but of course it is a lot more than just money when we talk about happiness. At present I work with OctaFX broker and there, I am able to gain so many benefits which bring happiness to me at least and when I am able to make profits regularly and earn money, it automatically gives me power to bring happiness to others as well, so happiness definitely go through money!

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  3. No and according to Paul McCartney and The Beatles, it can’t buy love either. I believe the question itself is really unanswerable with any satisfactory degree of accuracy. Regardless of the data presented in the article, happiness is subjective for every individual and can’t be empirically measured through any means. In fact, the surveys cited in this article have been used in other articles that use those survey results to argue that money does not buy happiness.

    So if the question of whether money can buy happiness can’t be answered using empirical study and analysis, is there an accurate answer for its corollary: What is happiness worth? An economist named Dr. Paul Frijters has attempted to answer this question.

    Dr. Frijters’ study shows, through strictly anecdotal research, shows that men value marriage at $32,000. Women, however, value marriage at only $16,000. There is an even greater gap between the way men and women value divorce. Men claim that getting a divorce is like losing $110,000 while women claim that divorce feels like a more manageable $9,000 loss.

    What does this all mean? Do men simply value the love and companionship that comes with marriage more than women or do women need less financial motivation to enter into wedded bliss? I don’t know. What I believe, however, is that happiness is different for every person and it has a lot to do with each individuals’ situation and, therefore, can’t be solved through a simple equation. I also believe an individual happiness can be influenced by their situation at any given time. For instance, I don’t believe that any amount of money will increase the happiness a person who has just been notified of the loss of a loved one. At the same time, there is likely no greater individual happiness than to hear that a potentially terminal disease has been eradicated. Maybe next, someone will study the economic value of being grateful for what we have.

    Reference

    Science 2.0 http://www.science20.com/science_paradise/economizing_happiness_whats_it_worth_you-61720

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  4. Can money buy happiness? That’s a question that we, as humans, have been trying to answer for centuries. I’ll agree with the fact that it’s not that it buys happiness as much as it’s the fact that we aim to have/own a couple of material things, live a comfortable life and provide to your loved ones. Can we argue that a very poor family living in Latin Americas or in Africa is significantly less happy than a millionaire? I would be more inclined to say the poor family with little to no income is happier than most millionaires and it’s because when there’s little to no love for money you tend to appreciate all the little things in life such as having your loved ones with you, sleeping and being in good health. The aforementioned are things that could easily become overlooked when there’s “too much money”. Now, if the millionaire were to give the poor family a couple of thousand dollars whose happiness would increase more? The millionaire or the family? Besides the fact that happiness cannot be measured in most instances I think it’s safe to say the poor family’s happiness will increase more due to the fact they’re going to be able to provide for themselves more than they used to, having access to things that they did not before. According to a study that was completed in 2010, it states that people don’t get any happier after earning more than 75K a year (Fahey, 2015), but each case is unique because if a person is struggling through a financial or personal issue in their lives money may not be able to help the situation.

    Fahey, M. (2015, December 14). Money can buy happiness, but only to a point. Retrieved March 27, 2016, from http://www.cnbc.com/2015/12/14/money-can-buy-happiness-but-only-to-a-point.html

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    Replies
    1. Emmanuel,

      I agree with a lot of your points. I believe that money may buy happiness for some people. I also strongly believe that your point of people in poverty or in third world countries find happiness within things that we here in America may take for granted. Many of these people would do anything to be healthy rather than malnourished and they would do anything for their family to be healthy as well.

      Happiness is defined differently to each individual. One person's happiness may be purchasing a car or a house. Another person's happiness may be having enough money to have a medical procedure done. There is such a drastic difference in what may make people happy. Many happiness wishes can be bought, but not everything that creates happiness can be bought with money.

      It's very often that money can be the reason that people aren't happy. Some people can't manage their money, they may not budget well, they may buy more than they can actually afford and then it can be the complete opposite of happiness. It can make people greedy, and feel a sense of power which can make them an ugly person. It may make them lose their friends or even family if they become an ugly person who feels empowered because of there money.

      This topic will be a never ending question with no correct answer. It is a debatable question for everyone to think about.

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  6. I think the answer to this question changes as you make more money within your lifetime. As a brand new college graduate, all you want to do is to make money and become independent. Whether you start off at $30,000 like I did or if you’re lucky, make over $70,000, you’re thrilled either way. In fact, when I reflect back, the less money I made, the more I saved because I was so anxious to move out of my parent’s house and build a life of my own. Money was everything.

    I decided to pose this question to my friend’s 11-year-old daughter. As if instinctively, she replied that money does buy happiness because it allows you to do the things you love to do. For her it was ice-skating. Makes sense, right? But the complexities of life are so elusive to a wide-eyed young lady. For me, I’ve witnessed her father, a hospital CEO, make a significant amount of money in his current position, but it brought an insurmountable amount of stress that has taken its toll on his health – both physical and emotional. When asked this question, his response was “The only person who can make you happy is yourself.”

    Clearly, everyone’s definition of happiness is different. It depends on a variety of things such a person’s circumstance or personal experiences. But what about scientific research?

    A 2014 article from the Wall Street Journal discussed this question that was answered by a psychologist who wrote a book called “Happy Money.” She said recent research suggests that the way we spend money matters more than having money itself in regards to happiness. For example, there was an experiment where money was given to a group of college students. A few of them were told to spend it on themselves and the others were told to spend it on others. After a follow up conversation, the study showed that the college students who spent that money on other people were happier than the other students.

    The last piece from the study was to consider how we spend our money. It was suggested to break out of our typical spending habits and consider buying experiences rather than material things. That’s what truly makes us happy.



    Reference(s):
    Blackman, A. (n.d.). Can Money Buy You Happiness? Retrieved from http://www.wsj.com/articles/can-money-buy-happiness-heres-what-science-has-to-say-1415569538

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  7. I agree with the above from Taylour that the answer to this question changes as you make more money in your lifetime but also as your experiences in life unfold. I am 24 years old working at a large corporation that doesn't pay well so of course, right now I think if I were making more money, I would be happier because I could buy a house and pay off my student loans.

    Money may buy you fancy things but it is what you make of it. Experiences in life count with the people who mean the most to you. I believe that people work towards making more money because they think that they will be happy when they are wealthier, but I think they will realize that money isn't everything in life. I think to a certain point money will buy you happiness but when you get everything that you wanted, you will realize there is something missing.

    More income means, most likely, more stress associated with the job. Probably long hours away from your home and family.

    I read in an article that people are buying things that will help their short term happiness rather than striving to buy things that will keep their happiness long term. People think buying a new pair of jeans or shoes will make them happy. They are spending money on empty investments. This article states that if money isn't buying you happiness, you aren't spending it right. Which I see how that would work, but I think theres more to it than what this article states.

    https://www.quora.com/Can-money-really-buy-happiness-If-yes-then-how-and-if-not-then-what-can-bring-happiness

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