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Hence, Is It Possible To Buy Happiness?

If human existence is regarded as having other potential scopes beyond survival and reproduction, it can be posited that happiness represents a central life objective (Maa and Zhang, 2013). This assumption relates to the growth that the field of positive psychology, is dedicated to researching what appears to make life worth living, both individually and on a communal level (Myers and Diener, 2018). Such an increase in academic interest is testified by the surge in articles related to happiness that have been published over the last two decades (Myers and Diener, 2018). Yet, as income is widely regarded as an essential means to attain happiness, psychological reflections acquire a strong economic character (Maa and Zhang, 2013). Departing from this consideration and from a conception of the current post-capitalist globalized society as permeated by a discourse leading to productive life rather than a ‘good life’ (Han and Badiou, 2017), this investigation will deconstruct the relationship between happiness and income through different parameters to verify how these two variables relate.

Figure 1: Partying at a Fusion Festival in Germany (Flipboard, 2019)

Different Definitions of Happiness, Different Roles of Income

Talking about happiness presumes a clear definition of the concept, needed to then generalize how it might relate to other elements, such as in this case, income. This consideration led psychologist Daniel Kahneman and economist Angus Deaton (who both won the Nobel prize in Economics) to deconstruct the notion of subjective well-being, commonly measured by asking people, "All things considered, how satisfied are you with your life as a whole these days?", through the concepts of emotional well-being and life evaluation (Kahneman and Deaton, 2010). The first refers to the emotional quality of a person’s everyday experience, that is, the frequency of experiences of joy, fascination, sadness, anxiety, anger or affection (Kahneman and Deaton, 2010). Life evaluation is instead connected to one’s thoughts about their own life (Kahneman and Deaton, 2010). This division is essential, as it serves to show how, while the effects of income on individuals’ self-reflexive life evaluations show no satiation, a threshold equal to $75,000 marks the influence of income on emotional well-being (Kahneman and Deaton, 2010).

Figure 2: The German philosopher Byung-Chul Han (Apuntes Filosoficos, 2022)

Nevertheless, by using a larger sample of global scope, Jebb et al. estimated that life evaluation does reach a satiation point at $85,000 on average, while the positive and negative emotions associated with emotional well-being showed satiation occurring respectively at $60,000 and $75,000 (Jebb et al., 2018). Fulfilling impulses such as joy or affection seems to be cheaper than preventing anxiety or anger to arise. Yet how could satiation be explained? A notion worth mentioning is the one of the ‘hedonic treadmill’, the phenomenon due to which happiness levels tend to return to a relatively constant baseline amidst various life events (Jebb et al., 2018). Henceforth, it can be posited that increases in income do impact one’s life, but mainly in a transitionary manner, without leading to absolute benefits. In addition to the observed saturation levels, it is also possible that higher income does not cause a decrease in subjective well-being, but rather burdensome demands could be related to it in the form of workload and stress (Jebb et al., 2018). In addition, as material issues become inevitably less of a worry, attention may move to more abstract or spiritual concerns, where the impact of income is limited (Kahneman et al., 2006). Returning to South Korea-born German philosopher and cultural theorist Byung-Chul Han's consideration of contemporary society, it may be the case for individuals shaped by values ​​related to productivity rather than happiness might find a mismatch between their expectations and reality once they reach a considerable level of income (Han and Badiou, 2017).

Figure 3: A graphical depiction of Kahneman and Deaton’s (2010) study.

From Individuals to Communities

While so far attention has been solely dedicated to the impact that income might have on happiness at an individual level, shifting the focus of the analysis to its effects on groups and communities can be useful to bring out considerations of a different kind. It can be useful to begin by introducing what is know as the Easterlin Paradox, formulated by the economist Richard Easterlin in 1974: income and happiness exhibit a strong positive correlation within a country, yet the correlation is weak, or nonexistent, in international comparisons or in studies that include long-term longitudinal comparisons (Easterlin, 1974). The paradox links to the role that other variables might have in altering the relation between income and subjective well-being.

While discussing income, a widely used criteria is per capita Gross Domestic Product (GDP), which however showed a weak correlation to happiness on an international level (Maa and Zhang, 2013). For instance, six Latin American countries that had less than one fifth of the per-capita GDP of developed realities like the US and Western European countries, reported an equally high mean happiness (Maa and Zhang, 2013). This assertion, coherent with the Easterlin Paradox, can be the result of a multiplicity of factors. One of them can be summarized through the so called ‘happy peasant and frustrated achiever’ problem, where the very poor report relatively high levels of well-being, while much wealthier individuals with more mobility and opportunities show lower levels of well-being and greater frustration with their economic and general condition (Graham, 2011). Poor respondents might have lower expectations or higher natural levels of cheerfulness, while richer ones display more criticism of their health situation and rely more on comparison, in line with the micro-level empirical work suggesting that concerns for relative income differences arise only once basic needs are met (Graham, 2011). Moreover, the poor tend to be better at dealing with constant insecurity, and wealthier individuals show a more disproportionate consideration of losses over gains (Graham, 2010). {2}

A fallacy of GDP per capita measures is that they do not represent in any way the way in which wealth is distributed, which is in turn a parameter that further helps to grasp how wealth and happiness interact. By studying the evolution over time of the income-happiness correlation within different countries, Oishi et al. (2022) concluded that the importance of the correlation grows as income inequality increases. As the economic gap of a society widens, people’s tendency to engage in upward social comparison deepens, while competition becomes a more prominent element too (Oishi et al., 2022). This relativization of socioeconomic positions fosters a higher consideration of income, and of its potential to lead to a happier condition. Furthermore, income inequality is usually larger in countries with low social welfare spending, which vests income of an even more relevant role (Oishi et al., 2022).

Are Two Actors Enough for the Whole Play?

Having investigated the correlation that income and happiness can have both at individual and group levels has been productive and able to provide adequate answers to the question posed at the beginning of this article. Firstly, defining happiness is crucial, as different interpretation of the concept can create unique results when discussing its relation with wealth acquisition. Nevertheless, it can be stated that a satiation can be reached when considering its role on both emotional well-being and life evaluation. The threshold might diverge from one reality to another, given also the importance played by social comparison, yet although income might increase indefinitely, mean happiness changes little over periods of time, due to its return to a relatively constant level. Wealth knows no mathematical bound, while feelings might be constrained by the limited nature of biological beings. Or as stated, to be enhanced they might need stimuli of different, non-material nature. In this sense, multi-variable studies might be able to provide a more complete depiction of how elements such as the ones considered, as well as social capital, faith, personal freedom and health might interact, which could in turn shed an more light on what seems to promote subjective well-being .

Figure 4: Cats as a prerequisite for subjective well-being? (Exploring your Mind, 2016)

An analogous line of reasoning can inform more macro-studies too. It has been shown how GDP, a widely used economic parameter is unable to account for whether economic output is actually translating into social well-being, and how a way to have income acquiring relevance in fostering happiness is for income inequality to rise. Yet again, incorporating these findings to more interdisciplinary studies could produce more fruitful and comprehensive results. In sum, it can be asserted that, regardless the complexities belonging to the analysis of the correlation between income and subjective well-being, increases in wealth gains directly impact happiness only until certain limits, over which material solutions cannot bring about relevant existential improvements, which may derive from more intangible, or spiritual stimuli.

Bibliographic References

Easterlin, R. A. (1974). Does Economic Growth Improve the Human Lot? Some Empirical Evidence. Nations and Households in Economic Growth, 89–125.

Graham, C. (2011). Does More Money Make You Happier? Why so much Debate? Applied Research in Quality of Life, 6(3), 219–239.

Han, B. C., and Badiou, A. (2017). The Agony of Eros. Amsterdam University Press.

Jebb, A. T., Tay, L., Diener, E., & Oishi, S. (2018). Happiness, income satiation and turning points around the world. Nature Human Behaviour, 2(1), 33–38.

Kahneman, D., Krueger, A. B., Schkade, D., Schwarz, N., & Stone, A. A. (2006). Would You Be Happier If You Were Richer? A Focusing Illusion. Science, 312(5782), 1908–1910. Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences, 107(38), 16489–16493.

Maa, Y. Z., & Zhang, Y. (2013). Resolution of the Happiness–Income Paradox. Social Indicators Research, 119(2), 705–721.

Myers, D. G., & Diener, E. (2018). The Scientific Pursuit of Happiness. Perspectives on Psychological Science, 13(2), 218–225.

Oishi, S., Cha, Y., Komiya, A., & Ono, H. (2022). Money and happiness: the income–happiness correlation is higher when income inequality is higher. PNAS Nexus, 1(5).

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Lorenzo Bragagnolo

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