Thursday, January 14, 2010

Money or Happiness? The answer might surprise you!

Economists tend to look at the raw data and draw conclusions based on their findings while applying what they deem is common sense.  For many the answer is simple, the more money you make the happier this will make you, right?

Psychologists, however, have also studied the relationship between wealth and happiness have also drawn their own conclusions. One such Harvard psychologist, Daniel Gilbert, is author of a book titled: Stumbling on Happiness. In his book he concludes that, “wealth increases human happiness when it lifts people out of abject poverty and into the middle class but that it does little to increase happiness thereafter."

Additional work has been done at Harvard by Michael Norton, Assistant Professor of Business Administration in the Marketing Unit at the Harvard Business School (HBS), and Elizabeth Dunn and Lara Aknin at the University of British Columbia (UBC). Three separate studies were done. The first involved a national survey of 632 American men and women. A second study tracked how 16 employees spent a profit-sharing bonus at a Boston-based company. Finally, the third study involved giving money to University of British Columbia students on campus. Those students were given the option to spend the money to cover a personal bill or expense, use the money to buy a gift for someone, or donate the money to charity. The conclusion of all studies showed that people were actually happier when the money they had was spent on others versus themselves.

All this confirms what many of us have heard from the Bible “It is better to give than receive.” Acts 20:35.

2 comments:

N. said...

Hi,

interesting thoughts!

I believe it’s not possible to make a general statement on whether money makes people more or less happy. Money comes with a whole set of new elements that may have good or bad impact on our happiness, and depending on how susceptible we are to every one of them, the conclusion will go one way or the other (i.e. different from person to person).

I recently made an effort to provide a more comprehensive picture of what these ad- and disadvantages are. I invite you to have a look at Money and Happiness and tell me what you think!

Thank you,

Nick

Nonprofitexpert said...

Nick,

While I agree, the point was trying to uncover the hidden truth most people miss. Many people find they are happy giving than just getting.

By the way I looked at your blog, great work! Thanks for sharing the link.