Money in Regard To Happiness, Well-Being and Satisfaction

Money in regard to happiness, well-being and satisfaction
Money can improve peoples motivation and impact negatively their behaviour towards others.
Money brings a new perspective that makes people reconsider what self-sufficiency means.
People have long debated the effects of money on human behaviour. Some research has proved
its role as an incentive while others have shown that it undermines interpersonal harmony.
Both outcomes emerge from the same concept: money makes people feel self-sufficient and
behave accordingly. It puts them in an isolated state where they strain to attain goals and prefer
segregation over congregation. Money causes a mixture of desirable and undesirable effects in a
person, which may help explain the consequences of money overall, but mainly related to
happiness.
If money brings about a state of self-sufficiency, then a lack of money should make people feel
powerless and their efforts futile.
But is there a causal relation between money and happiness? According to conventional
economics, money can buy happiness because it can be exchanged for goods that can increase an
individuals efficiency and self-worth. Thus, higher incomes should lead to greater happiness.
The links between money and happiness are often diminished, but the effects can be seen in
developing economies based on low income, and even a small change can reflect substantial
difference in happiness. However, the data does not necessarily reflect a simple causal relation
between money and happiness. The concept that increasing income leads to increasing happiness
does not take into account the Easterlin paradox that income and happiness are positively
associated within a country at a given time, but not as much within a country over a period of
time (Easterlin, 1974).
Moreover, being amongst people that earn more than an individuals income can be detrimental
to the individuals well-being and overall happiness. Self-rated happiness and satisfaction scores
suggest that the feeling of self-worth and efficiency, directly linked to happiness, is not
influenced by an absolute level of income but by an income relative to that of their peers.
The reference income hypothesis is the dominant model of income comparison, based on the
idea that people resort to comparing their income to the norm of a socially constructed group.
According to a rank-based model, individual thrive by occupying a higher ranked position within
an income distribution rather than from either absolute income or position relative to the norm.
For example, it might be relevant to their happiness if they are the first most highly paid person
or the fifth in their organization.
A large part of national surveys has shown that income has a constant, reliable but weak, effect
on happiness within countries, especially once basic needs are met. Incomes have surged
exponentially over the last decades but regardless, happiness levels remained mainly flat within
developed countries over time. One of the possible explanations for this counterintuitive result is
that people often engage in pursuits of short-term satisfaction, such as purchasing high-value
goods, rather than investing in a lasting happiness. However, money has potential to increase
happiness if it werent for the choices it breeds. It influences people in such way that it makes
them less likely to help, donate to charity or choose to spend time with others, the very
behaviours that are strongly associated with happiness. Money may alienate people from
prosocial behaviour, but it can also provide the means to undergo prosocial experiences. While a
large body of research has shown that people with more money are relatively happier than those
with less, studies (Dunn, Aknin, Norton; 2013) demonstrate that the manner in which money is
spent matters in happiness. The benefits of such prosocial spending can be detected in
individuals across cultures, mainly when giving fulfills one or more core human needs. As it is,
investing money in others may have measurable benefits for an individuals happiness.
In the matter of how income affects society, this poses an important question on whether wealth
promotes a better society. Most societies strive for material prosperity, gaining wealth being the
activity that occupies most of the time of individuals and governments. Times is spent more
working, than performing any other activity, while governments stress the importance of
economic growth. Thus, the dilemma is whether economic growth will improve an individuals
well-being and subsequently increase happiness. There are doubts about economic progress as
the implied materialistic view would negatively influence social relationships and impact human
values. Easterlin (1974) brought a source of debate in the idea that economic growth does not
produce happiness. He explained the paradox of rich individuals being happier than poor ones,
but rising incomes in society is not associated with subjective well-being. Easterlin goes on to
state that social comparison within nations is responsible for the paradox, because peoples
standards for incomes rise when the income of others increases in the same society, therefore
there is no gain in life satisfaction or happiness as average income increases.
Bibliography
Boyce, C. J., Brown, G. D., & Moore, S. C. (2013). Money and Happiness: Rank of Income, not Income,
Affects Life Satisfaction. Psychological Science.
Diener, E., & Tay, L. (2012). Rising Income and the Subjective Well-Being of Nations. Journal of
Personality and Social Psychology.
Dunn, E. W. (2013). Prosocial Spending and Happiness: Using Money to Benefit Others Pays Off.
Harvard Journal.
Dunn, W. E., Aknin, B. L., & Norton, I. M. (2008). Spending Money on Others Promotes Happiness.
American Association for the Advancement of Science.
Easterlin, A. R. (n.d.). The Economics of Happiness.
Johnson, W., & Krueger, F. R. (2006). How Money Buys Happiness: Genetic and Environmental
Processes Linking Finances and Life Satisfaction. Journal of Personality and Social Psychology.
Vohs, D. K., Mead, N. L., & Goode, M. R. (2006). The Psychological Consequences of Money. American
Association for the Advancement of Science.

Money in Regard To Happiness, Well-Being and Satisfaction

Uploaded by

Copyright:

Available Formats

Money in Regard To Happiness, Well-Being and Satisfaction

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Money in Regard To Happiness, Well-Being and Satisfaction

Uploaded by

Copyright:

Available Formats

Money in regard to happiness, well-being and satisfaction

You might also like