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Does Money Buy Happiness?

How people have started to realize the benefits of money towards your mental health

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Does money buy happiness?

If you're reading this, you've probably heard of the phrase 'Money can't buy you happiness'. You've probably heard this from various sources such as movies, teachers and parents, and for the longest time the consensus revealed that money cannot buy a person happiness. But what if I told you that this statement is not entirely true? Let us take a look at whether money can indeed have a positive effect on your mental health.

PNAS JOURNAL Wealth redistribution experiment

This study was conducted to observe the effects that money can have on happiness. It was done by giving 200 people in seven countries US$10,000. These 200 people were then given three months to spend all their money whilst rating their happiness on a scale of 1 to 7 on how much satisfaction they felt. A control group that did not receive the money was also added to compare the level of satisfaction for both groups.

So what is the significance of this and could equal money distribution be the key?

If all the money in the world was distributed equally and fairly, would happiness be easier to achieve? This question has been asked for decades yet no real proper answer has been figured out yet. Studies show that those that live in developing or third world countries shown greater signs of happiness than those in first world countries. However, even in these higher income countries, money in the form of cash has shown increase happiness even in households with an income of over US$100,000.

In basic economics, income equality is often one of the common problems that most governments deal with. One of the main goals of a government is to provide its citizens with a good standard of living and a good quality of life. Despite this, the richest 10% of the world own about three quarters of the world's wealth whilst the poor own a measly 2%. This shows how significant income inequality leads to significant levels of unhappiness.

Other studies shows that those with higher incomes are associated with having better health and having more advantages in other aspects of life. Even in education a study has found that students that are happy in high-school are more likely to have a higher earning in their future profession.

Results of the wealth redistribution experiment

As mentioned above the participants of the study received US$10,000 each and were told to spend the money in three months. After three months, the group of 200 that got the money had exhibited significantly higher levels of happiness than the control group who had not received any money. The experimental group even after three months had reported higher levels of happiness and satisfaction.

However, these results are from the lower income countries (Brazil, Indonesia and Kenya). The study also had participants from high income countries which were Australia, Canada, the UK and the US. The findings from these higher income countries are different with the participants not showing as much satisfaction as the participants from the lower income countries. Now what was the reason for the differences in results. These results could be explained by the differences in currency between lower income and higher income countries. US$10,000 may not seem like a lot back in the states however US$10,000 can afford you a lot of luxuries in other countries especially if they're third world.

So what is the final verdict?

After seeing the evidence from the wealth redistribution study, we can safely say that money can indeed buy you happiness - but only to an extent. While the results show some majority of the participants reported being happier after having the US$10,000, several other factors affected this, such as: most of the participants being from lower income countries and therefore perceiving US$10,000 with much more value than a participant from the US.

With that being said, there are also other factors in a person's life that can cause happiness or unhappiness based on whether money is present or not. For example, Dwyer conducted a study in which he found that people with incomes higher than $80,000 report feeling happier but Dwyer later reported that this was likely due to the initial excitement at the reception of the money and that over time this excitement was due to fade away. Similarly, a behavioural scientist called Ania Jaroszewicz conducted a study where participants were given a one time payment that ranged from $500 to $5,000 towards low income people. Even after 15 weeks the participants had not experienced any elevation in their happiness levels . So what does this tell us? Jaroszewicz says that happiness levels of a person is not directly dependent on the presence of money. It could also go down to the personal circumstances of that person, age, living situation, relationship status or even relationship to close family members.

Perhaps the presence of certain entities such as the giant that is social media has created a false illusion on the younger generation as they see their favorite celebrities with the latest clothing and tech. They assume that making a certain amount of money is entirely life changing but instead they realize that actually the problems get bigger and sometimes the problems from before remain. If you need more convincing that money cannot buy you long-term happiness just take a look at Jeff Bezos and Bill Gates. With a combined net worth US$231.4bn, Gates and Bezos are two of the richest men alive, yet even with all of this wealth and power, Bezos has divorced his wife and the same goes for Melinda Gates who is also no longer with Bill Gates. This goes to show that you could have all the money in the world and have the ability to get anything you want and yet none of that can achieve happiness with your significant other.

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