Happiness

by Ed Diener

  Although incomes have increased dramatically since World War II, people are not a lot happier. Why not? As the industrialized world has become more affluent, the average level of aspirations has also risen. What was once seen as luxury - owning two cars, for instance - has become a "necessity" for many in modern times. With this kind of luxury fever, people can always feel poor. Each of us must ask ourselves whether we have become a victim of our rising material desires.

  Buyer Beware: The Toxic Effects of Materialism

  Having high aspirations is not always bad, especially if they match your level of income. However, when aspirations run out of control, and are too heavily focused on physical comfort and luxury items, we brand this "materialism." Materialism, simply put, is wanting money and material goods more than you want other things, such as love or leisure time. Of course, we all want a good income, but materialistic people think money is the most important thing in life. How happy are materialists? Most studies show that materialistic peopleare less happy than others. That's right: although having money proves to be a boon to happiness, wanting money too much can detract from it!

  Take a look at some results from a study on materialism and happiness conducted with college students. In figure 6.3, we show the life satisfaction of people with different levels of income. There are two lines-one for those who said money was not important, and another line for those who said money was extremely important. As can be seen, the materialistic people are less satisfied with their lives at each level of income, except for the highest level of wealth, where they finally catch up.

  The happiness of materialists can suffer because their pursuit of money distracts them from other important aspects of life, such as relationships. Huge sums of cash require hard work, and materialists tend to put in extra time at the office and miss out on quality time at home. Although many people enjoy their work, too much of it can harm happiness if the person then has little time left for family and friends. In addition, materialists tend to be dissatisfied because their aspirations are so high, and constantly trend higher. In this way, materialism is a neverending pursuit, with one materialistic goal being quickly replaced with another. No matter the income level, there is always a more expensive car, house, vacation, jet, or private island for which a person can strive. Because materialists tend to earn more money than others, some of the toxic effects of materialism on psychological wealth are damped. However, it is harder for materialists on average to be happy at the same level of income as nonmaterialists because they very often feel as though they need more money, no matter how much they have.

  Figure 6.3 Life satisfaction for people varying in valuing money

  Some readers still may not be convinced that heavily valuing money is toxic to happiness. After all, how can a plasma screen television, a PlayStation game console, or a new set of golf clubs be harmful? Aren't these examples of fun recreational pursuits that can be enjoyed with friends? As it turns out, some clever research illustrates both the benefits and downsides of money. Kathleen Vohs and her colleagues were interested to discover how money, and even reminders of money, affects people psychologically. To do this, they primed the concept of money by leaving subtle reminders around the research laboratory. For instance, they placed a flying dollar as the screen saver on a computer screen in the room, or put a framed dollar bill on the wall. Amazingly, research participants who were exposed to these small monetary cues felt more self-confident than those who were not. They also were able to persevere longer at a difficult task without asking for help than folks in the no-money condition. The effects of money, however, were not all positive in Vohs's study. The people in the money-cue condition were also less likely to be sociable later on, preferring to wait for the experimenters alone rather than with others, sitting farther away from others in a waiting room, and opting for solitary rather than group activities when offered the choice. The money-primed participants were also less helpful to a confederate who appeared to accidentally have dropped his belongings, and they donated less of their experimental earnings to charity when given the opportunity to do so. Thus, the merest hint of money led to a tendency for folks to feel confident, but also to feel more distant from others.

  Children in Wealthy Families

  As industrialized countries grow increasingly rich, there are more children growing up in affluent families than ever before. Although this means that children have access to good schools, lessons, tutors, and other resources in record numbers, kids of wealthy parents also face a number of problems. Many children see too little of their hardworking parents, and modern technologies like BlackBerries and mobile phones have made it easier for jobs to encroach on family evenings and weekends. Another problem is the pressure kids face to achieve - successful and prosperous parents usually hope their children will achieve at the same high levels. Some insist that their children only attend the most elite universities. But the offspring may have less ability, less motivation, or different values. Unfortunately, because many children grow so accustomed to comfort and luxury, they experience extra pressure to excel in pursuits that will allow them to continue in that lifestyle. If a child becomes too accustomed to luxury, his or her freedom can be limited because lower paying but rewarding jobs, such as art and teaching, are psychologically off-limits. Finally, wealthy youths are sometimes given the idea of entitlement, and feel that they are better than others. They feel that their money places them above others, above the "little people."

  The fact that children in upper-class and upper-middle-class families face a particular set of challenges does not mean that money corrupts. There are plenty of great parents and wonderful children among this group. For the most part, though, these are kids whose parents did not instill an overly materialist mindset. They are children who grew up in families that emphasized togetherness, taught values other than material ones, were instilled with a sense of responsibility toward others, and who learned that comfort is a privilege rather than a right. We don't mean to exaggerate the difficulties of rich kids - poor kids undoubtedly have more severe challenges. But it would be a mistake not to realize that wealth has its own problems.

  It is ironic that as rich nations have increased their wealth, people have not on average become a lot happier. One reason is that material aspirations have continued to rise, so that many people feel short on cash. Another reason is that people who "want it all" often feel stressed and stretched thin. They don't have enough time for family and friends, and need to work longer to make ends meet. As Herbert Hoover reputedly said, "Just when the ends meet, somebody moves the ends." Thus, it is important to remember that as we grow wealthier, happiness will increase only if we keep our material desires well within our incomes.

  Benefits of Money (Besides Having Stuff)

  In understanding when and why money sometimes helps happiness and sometimes does not, it is important to understand that some of the benefits are not simple purchasing power. Income has benefits that do not depend on how much we spend. These nonmaterial benefits help explain the paradox that the rich on average are happier than the poor, but that people in wealthy nations have not increased much in happiness over the past decades despite the fact that average incomes have risen dramatically.

  Earning Money

  Although making money is an unpleasant hardship for some people, and is seen as a cost rather than a benefit by some economists, many people derive pleasure from their work. Furthermore, some people absolutely love their work, and this can be especially true of people who own their own businesses or who work in higher status jobs. Quite simply, these individuals might gain some happiness from spending money, but they truly gain enjoyment from making money. The challenges and activities of making more money lead these individuals to want more money, rather than the additional luxury items they might acquire.

  Just as some people love their work, others do not. Indeed, some people loathe their jobs. For these individuals, the more they earn - and hence usually the more time t
hey spend working - the less total happy time they experience. Even people who enjoy their jobs might enjoy alternative activities, such as leisure time with family and friends, even more. Hence, higher incomes can relate to either more or less happiness because a major way to earn more money is usually to work more.

  Social Status

  Although no one wants to own up to having ambitions toward high social status, it is perfectly natural to desire a rung high up on the social ladder. We don't mean being snooty or feeling entitled; we are talking about respect. Rich individuals tend to occupy higher social positions and command more respect than their poorer counterparts. The guy who heads a company with a thousand employees receives far more respect from friends, colleagues, workers, and even strangers than does a homeless man or a cashier in a coffee shop. If you aren't convinced, consider this experiment we once tried. As an experiment, one of the authors, Robert, once went without bathing, dressed in dirty clothes, and stood on a busy street corner with a cup brimming with quarters. He tried to hand out free money to passersby, but after an hour, not a single person had taken money. Most people avoided eye contact or made a wide arc around him, but one person donated money! Now imagine a well-groomed man in an Armani suit with a Rolex watch handing out change on a corner. Although it might raise a few eyebrows, people would more likely approach him, ask questions, and take the money. Money often translates into the respect of others and high social status, and so even those who don't want many worldly goods may want a high income for the respect it brings. After all, we all want to feel good about ourselves, and other people's respect can be helpful in this regard.

  Because of the status factor, the value of money depends in part on social comparison - where we stand relative to others. This is why many people say they would prefer to earn $50,000 in a society where others make $25,000 rather than earn $100,000 in a society where others earn $200,000! H. L. Mencken put it well when he observed that a rich man is one who earns $100 more than his wife's sister's husband. The value of income for happiness is not just the goods and services money can buy, but the respect it can purchase as well.

  The researcher Chris Hsee studied the effects of money on satisfaction, sampling respondents from all over China. What he found was that money can have an absolute influence on satisfaction when some basic need, such as food, is involved. But for status items, such as jewelry, the effects of wealth on satisfaction depend on how much a person has compared to how much other people in that area have. This helps explain why rich people are happier, but why, as rich societies have gotten richer, they have not increased much in happiness. Some things money can buy, like food, matter regardless of what others have, whereas other items that confer status have value primarily in reference to how a person stands in relation to others.

  Personal Control

  Whether we like it or not, money is one of the things that leads to self-reliance and control of our lives. Additional income means that we can pay off debt, engage in more expensive activities, and enjoy more flexibility in our work. Also, when life presents hassles, as is invariably the case, more money means being better able to deal with most crises and unexpected events. For example, both authors of this book have been involved in hit-and-run accidents (on the receiving end!) and, while the price of the insurance deductible stung a bit, it was probably less painful for us than for someone scraping by paycheck to paycheck. If emergencies arise, having money can often help you to overcome them. Things are easier if you are rich when your house burns down, your car is wrecked, or you need special medical treatments. Financial resources can serve as a buffer against life's negative events.

  There might be some primal connection between the secure feeling of having resources and the happiness money can deliver. In a set of studies in Belgium, Barbara Biers and her colleagues found that hungry people were less altruistic, donating less money to charity. Furthermore, people who were reminded of money and the things it can buy were hungrier when exposed to a taste test. It appears that money taps into feelings that are related to more basic resources, such as food. Accumulating money might make people feel good because it gives rise to the same feelings as accumulating food did in our ancient past, and there may be good reason for this connection: financial resources can help people overcome at least some of life's difficulties.

  Pleasure in Shopping

  Besides the consumption of goods, people may enjoy the activity of shopping. We are fearful of bringing this up because many of our friends and colleagues deplore shopping and believe it is a sign of crass materialism. Yet we know a man who loves shopping for tools, another who prizes shopping for food, and many people who are ecstatic about clothes shopping. We know one woman who buys little for herself, but loves buying presents for others. Even among the critics of materialism, we know that one loves buying wine, another prizes purchasing books, and the third enjoys buying music. It is just that they don't care about shoes and clothes, and therefore hate the idea of "shopping."

  We believe that shopping and the activities that are required to be a knowledgeable consumer can be a source of pleasure for many people. Maybe this should not be so, and maybe there are better ways to be happy. But let's face it: some people love shopping for clothes! And the good thing about this activity is that it can be afforded to some degree by most people because it can occur at a range of prices, from Wal-Mart to Rodeo Drive. Books such as Robert Frank's Luxury Fever and John de Graaf's Affluenza point to the detrimental effects of materialism and consumerism, and certainly these exist. However, although shopping is not the royal road to lifelong happiness, it might give many people boosts of pleasure-which is harmless, as long as it is not an addiction.

  Ability to Help Others

  Of course, not all wealthy people are materialistic, and rich people can do things with their money to help the world. When we think about wealth and happiness, the first thing that comes to mind is that additional income means that we can better obtain the things we want - a new Toyota, that trip to Mexico, or plants for the garden. If you like music, money is what affords you the highest quality sound system or abundant store credit at iTunes. If you enjoy skiing, wealth can get you a season pass on the nearby slopes, a new jacket, or a weekend at Whistler. While there is undoubtedly more to life than buying things, the ability to upgrade your kitchen, take a family vacation, get a dog, or obtain other things you value can sometimes increase your happiness, at least in the short run. But money can also help folks make meaningful contributions to the world.

  No matter what your personal, political, or business opinion of Bill Gates, it is amazing to think about the change he is effecting with his billions of dollars in charitable giving to Africa, and those of the cofounder of Microsoft, Paul Allen, who has been donating millions to scientific research. Of course, being rich is no guarantee of a prosocial attitude, but history is full of examples of the amazing generosity of the world's wealthiest citizens. Alfred Nobel left a legacy of promoting important advances in medicine, science, literature, and peace. John D. Rockefeller was instrumental in the preservation of vast amounts of land for national parks in the United States. Because of her wealth, Oprah Winfrey has the ability to experience the enormous satisfaction of starting a girls' school in Africa. The billionaire Warren Buffet has changed the face of philanthropy by donating his fortune to the Bill and Melinda Gates Foundation.

  Great satisfaction can lie in creating such a lasting and meaningful legacy. Take the fascinating story of John Robbins, the heir of Iva Robbins, the founder of the immensely successful ice-cream chain Baskin-Robbins. Rather than following in his father's business footsteps or cashing in on his millions, John broke ranks and moved to a simple cabin in Canada. He became disillusioned with the dairy and beef industries and wrote an influential pro-environment book called Diet for a New America. In recent times, John has worked with his son, Ocean, to form a large environmental organization for youth, and a program to help wealthy people use their money in meaningful
ways. Of course, altruistic giving need not be on the hulking scale of the donations made by billionaires. More modest wealth can be used to help those we love-our parents, our children, or our communities. We can send kids to college, pay for expensive medical care, or help friends in times of need. Money, then, can be more than a crude material concern: it can be a vehicle for helping others and feeling good about yourself.

  Making Sense of the Paradox

  The important lesson for readers is that money means a lot more than purchasing power. It can mean status, feelings of control, and enjoyable work. At the same time, materialism can be toxic to happiness, and too much work can interfere with other areas, such as family life. Therefore, readers need to carefully pursue income with a keen awareness of how it can help and harm happiness.

  Conclusions

  It might surprise some readers to learn that, with some important caveats, money can help buy happiness. Many folks want to believe just the opposite. We have heard people claim that wealthy individuals are more stressed out and greedy, and even that they need tranquilizers to sleep at night. In fact, many psychologists believe the myth that income is not related to happiness, perhaps because we would all like to believe that people from every walk of life have an equal chance at fulfillment. Furthermore, the idea that money doesn't increase happiness is consistent with concerns about rising individualism and rampant materialism, as well as with our worries about the environmental problems that economic growth can bring. So we apologize to all those who were positive that money doesn't help happiness. The data from a variety of studies paint a different picture: rich people tend to be happier than poor people, people in wealthy nations are more satisfied with their lives than their less affluent counterparts, and lottery winners are happier than others. It might not seem fair that some folks have not only big bucks but more happiness as well, but rather than begrudging folks their good fortune, consider how money could boost happiness. Additional income can translate to greater social status, feelings of personal control, a sense of security, and unique opportunities to make a lasting contribution to society.