Who Says Money Cannot Buy Happiness?

Does money buy happiness? It's sometimes said that scientists have found no relationship between money and happiness, but that's a myth, says University of Illinois psychologist Ed Diener.

The connection is complex, he says. But in fact, very rich people rate substantially higher in satisfaction with life than very poor people do, even within wealthy nations, he says.

"There is overwhelming evidence that money buys happiness," said economist Andrew Oswald of the University of Warwick in England. The main debate, he said, is how strong the effect is.

Oswald recently reported a study of Britons who won between $2,000 and $250,000 in a lottery. As a group, they showed a boost in happiness averaging a bit more than 1 point on a 36-point scale when surveyed two years after their win, compared to their levels two years before they won.

Daniel Kahneman, a Nobel-Prize winner and Princeton University economist, and colleagues recently declared that the notion that making a lot of money will produce good overall mood is "mostly illusory."

They noted that in one study, people with household incomes of $90,000 or more were only slightly more likely to call themselves "very happy" overall than were people from households making $50,000 to USD 89,999. The rates were 43 per cent versus 42 per cent, respectively.