Study reports money doesn’t buy happiness

A psychologist at Stony Brook University, collaborating with scientists at other institutions, has discovered what philosophers have long known: Money doesn’t make people happier.

Yet the perception that it does continues to motivate people to want more and do more to get more. In a study that appears today in the journal Science, Stony Brook’s Arthur Stone, vice chairman of the department of psychiatry and behavioral sciences, working with scientists at Princeton University, the University of Michigan and the University of California in San Diego, explore the intangible relationship between money and happiness.

“It’s mostly illusory,” Stone said. “When you look at people’s actual experience, the rich are not happier than others. And if they are, it has little to do with the money they have.”

For decades, psychologists would ask people whether they thought others with more money were happier, and the people said, “of course.”

Stone’s latest techniques for measuring real-life experiences include a fly-on-the-wall approach, an electronic writing pad that beeps randomly throughout the day to get the volunteer to fill out a mood diary and questionnaires that reconstruct yesterday’s experiences.

What he came to realize is that people asked to imagine a future with money, whether for themselves or others, always tend to exaggerate the importance of this single change in circumstances.

He explained that people forget that the everyday stressors and joys of life go on, money or not. “Having a lot of money or a big house has little to do with a person’s daily mood,” which ebbs and flows depending on the individual and the events of a given day. This is a very different picture than what emerges when people are asked the global question: Does/could money buy happiness?

In the latter case, Stone and his colleagues, including Princeton’s Daniel Kahneman, who won a Nobel Prize in economic sciences in 2002, say that people tend to exaggerate the benefits of an imagined monetary gain. “Such questions elicit a global evaluation of one’s life,” the authors wrote. “Increases in income have been found to have mainly a transitory effect on individuals’ reported life satisfaction.”

The reason for the difference between perception and reality is that thinking about the future triggers a cognitive process that exaggerates the positive and the negative. “People forget that all of the other things in their life don’t change,” Stone said. “Even in the new circumstances, you will still be the same person with the same problems.”