Monday, October 18, 2004
Economists now agree: 'You can't buy happiness' Buying 'stuff' doesn't do it, survey shows
By PETER SVENSSON THE ASSOCIATED PRESS
NEW YORK -- Everyone has heard that "you can't buy happiness," but that doesn't stop many of us from working long and hard for more money.
Now, however, even economists are saying that money isn't everything. There really is a rat race, they say, and the cheese at the end doesn't taste that great.
These economists have started looking at surveys that basically ask people how happy they are. An important finding: Money spent on "stuff" -- tangible status symbols such as bigger homes and cars -- doesn't increase a society's happiness.
"If we use an increase in our incomes, as many of us do, simply to buy bigger houses and more expensive cars, then we do not end up any happier than before," Robert Frank, professor of economics at Cornell University, wrote in a recent essay.
On an individual level, there's no denying that money does do some good. A recent Associated Press poll showed that people who make more than $75,000 a year are far more likely than those who make $25,000 or less to say they are "very satisfied" with their lives -- 56 percent of the higher-income group compared with 24 percent of the lower-income group.
However, average incomes have more than tripled in the last 50 years, while average life satisfaction has held steady. The economy has grown substantially, but somehow it left happiness behind.
"The evidence thus suggests that if income affects happiness, it is relative, not absolute income that matters," Frank wrote.
In other words, more money will make you happier, but only as long as those around you don't also earn more. Also, you get used to earning more money, so after a while it doesn't cheer you up as much as it did at first.
"You always find somebody who has more money than you and a bigger house than you, and it just becomes one big leap after another," said Louise Brooks, who manages a real estate office in Glen Cove on New York's Long Island.
"It's a matter of thinking you need to prove something to the world, and as you get to be my age, you realize it's irrelevant," said Brooks, 61.
In her work, she sees a lot of wealthy people: "I see some of them are miserable and some of them are fine. I think it's just like middle-class Americans."
On the other hand, she said, "I think you see a lot of poor people -- really poor people -- who are unhappy, and I don't blame them for that."
It seems to work the same for countries, according to Ed Diener, a professor of psychology at the University of Illinois and a pioneer in the study of happiness.
Poor countries that become richer can gain substantially in happiness, Diener wrote, because the growing economy helps satisfy basic human needs, such as food, shelter and health care. But once average annual income increases above about $10,000, happiness rises only very slowly, even if the economy booms.
The economists who are starting to pay attention to happiness, including Richard Easterlin, professor of economics at the University of Southern California-Los Angeles, say the reason developed countries don't get more happiness out of their money is that the money isn't used well.
Large homes and luxury goods don't do much for us in the long run, but there are other spheres of life that give a lasting contribution to happiness.
Sitting in the sun on the stoop of her New York home with her 7-month-old baby in her lap, Carolyn Rivas was a picture of contentment. She used to work as a teacher, but is now home to take care of Maya.
"Clearly we don't have as much money now as we used to, but I'm so much happier," Rivas said.
She's not alone, according to psychologists and economists -- a good family life is worth more than money.
People who get married, for instance, don't seem to "get used" to that situation -- they're happier than singles and likely to stay that way, according to Easterlin.
Health is another example: We get used to some extent to being in poor health, but we rarely adapt completely to being sick.
"A reallocation of time in favor of family life and health would, on average, increase individual happiness," Easterlin wrote.
That sounds reasonable, but what happens if you start taking time off work to be with your family? Your employer won't like it and may start shifting your responsibilities to more gung-ho workers. Pretty soon you'll find your career stalled, overtaken by people willing to work more.
"It's not a problem you can fix on your own," Frank said.
He recommends changes in public policy, such as doubling the number of national holidays, cutting pollution and reducing the length and stressfulness of commutes.
Easterlin advocates policies that address "some of the fundamental anxieties that people have in life," such as health care and worrying about caring for aging parents. European policies, he said, lie much closer to what "happiness science" suggests.
"It struck me in Sweden how people were really happy about the fact that there was excellent provision for their aged parents," he said.
Recommendations like that won't sit well with classical economists, particularly conservative ones. Bill Beach, economist at The Heritage Foundation, a conservative think tank in Washington, doesn't think there should be any national holidays.
"Should we be getting into the business of telling people not to work?" he said. "People might want to work. Work is not necessarily an unrewarding activity."
Besides, he points out that studying happiness is a tricky business: "It's a subjective state. Two people say that they're unhappy -- does it mean the same thing to both of them?"