Maybe Money Does Buy Happiness After All

MONEY can buy you happiness - but only if you are richer than your neighbours, according to the results of research released yesterday.
Sociologists found that it was not strictly true to say that being well-off will not make a person happy.

But it depends on whether a person is able to "keep up with the Joneses".
Researchers in the United States examined the "hedonic treadmill hypothesis" that suggests people are in a continual wealth race with their neighbours.

Measurements were taken of the age, the total family income and the general happiness of a group of people aged 20 to 64.

The results showed that the richer people were relative to their peers of the same age, the happier they tended to be.

Glen Firebaugh, from Pennsylvania State University, who led the study, said: "We find, with and without controls, that the higher the income of others in one's age group, the lower one's happiness.

"Families whose income earners are in jobs with flat income trajectories are likely to become less happy over time.

"Thus the relative income effect observed here implies adverse effects for some individuals over the working years of their life cycles."

Relative income was much more important than absolute income when determining the happiness of individual Americans.

Because of the relative effect, continued income growth within rich countries such as the US is irrelevant to overall happiness, according to Mr Firebaugh.

"Rather than promoting overall happiness, continued income growth could promote an ongoing consumption race where individuals consume more and more just to maintain a constant level of happiness," he added.

While income was important, the best predictor of happiness was good physical health, the researchers found.