CAN MONEY BUY HAPPINESS?

L. Etherington, H. Gwilt & S. Phylaktou

Overview• Introduction

• Research Paper 1: Money and mental wellbeing(Gardner, J. & Oswald, A. J., 2006)

• Research Paper 2: Money matters, but less than people think(Aknin, L. B., Norton, M. I. & Dunn, E. W., 2009)

• Suggested Improvements

• Other research

• Conclusion

Introduction• Money is power• People = Risk Aversive

• Loss = Painful (activates anterior insula, associated with pain and disgust)

• Changing population• Increase of women in work: doubled since 1950’s• Family size decreasing: 1.8 children per couple• Caldwell (1976): children = economic liabilities

• University studies – why are we here?

Dillow (2012), Livesey & Lawson (2008), Heathfield, USA GOV (2003)

Paper 1: Lottery Wins and Wellbeing

Aims•Aimed to see effect of lottery wins on wellbeing

Method•Longitudinal Study •137 medium-sized lottery wins between 1998-2001•Compared to 2 control groups; small wins and no wins•Used GHQ scores from the BHPS to gain an objective measure of mental wellbeing

Gardner, J. & Oswald, A. J. (2006)

Results•On average, mental stress

increases in year of win•Mental wellbeing increases

after two years (1.4 drop in GHQ)•Similar increase for both sexes,

men slightly larger

Conclusions•Winning the lottery is associated with improved mental wellbeing

Gardner, J. & Oswald, A. J. (2006)

Critique Suggested Improvements

Objective measurement of well being –GHQ score

N/A

Experiment using control groups - increased validity

N/A

Culturally dependent Multi-cultural sample

Small sample – only 137 Larger Sample

Concluded increase in wellbeing was result of lottery winning - presumption?

Need to measure other life factors. Should have explicitly asked.

Unable to measure adaptation to money over long period

Should have followed up

Boundaries between medium sized wins and small wins are too small

Should have boundaries that are more separate

Paper 2: Money matters, but less than people thinkPart 1: Predicting wellbeing of others based on household income

Aims•Examine the accuracy of laypeoples intuition about relationship between household income and wellbeing of others

Method•429 Americans reported annual income from list of categories•“How would you rate your life overall these days?”•Consider 10 different household incomes, asked to predict the life satisfaction of someone at each income level

Aknin, L. B., Norton, M. I. & Dunn, E. W. (2009)

Aknin, L. B., Norton, M. I. & Dunn, E. W. (2009)

Results•People on higher incomes reported

greater happiness •Accurately estimated higher levels

of household income with greater

happiness •Overestimated the unhappiness of

those in lower income households

Part 2: Predicating wellbeing of oneself based household income

Aims•Test validity of part 1 – i.e. should still wrongly predict the association between money and happiness

Method•315 Americans reported annual income from list of categories•“How would you rate your life overall these days?”•Consider 10 different household incomes, asked to predict the life satisfaction of themselves at each income level.

Aknin, L. B., Norton, M. I. & Dunn, E. W. (2009)

Study 2: Money matters, but less than people think

Aknin, L. B., Norton, M. I. & Dunn, E. W. (2009)

Results•Showed consistency when predicting

their own and others happiness•Results support findings of Study 1

Conclusions•Vastly overestimate emotional cost associated with being poor… i.e. money matters, but less than people think

CritiqueCritiques Suggested Improvements

Rewards for participation – increased motivation

N/A

Used consistent methodology across both parts of study

N/A

Culturally dependent Multi-cultural sample

Subjective measurement of wellbeing

Need standardized, objective measurement

2 Different Samples Within subjects design

Other Research• Diener et al. (2010) - conducted a study on wealth and

happiness. Used worldwide sample of 136000 subjects and found that long term income changes are more related to positive life evaluations not feelings.

• The ONS has found that being married is 20 times more important to a person’s well-being than their earnings, so the increase in wellbeing in the lottery study may have been due to other factors such as getting married.

• P. Brickman, D. Coates, & R. Janoff-Bulman (1978) – lottery winners were not happier than controls and took significantly less pleasure from a series of mundane events. Found not to be due to pre-existing differences. Evidence for adaption level theory.

Adaptation Level Theory vs. Assimilation Contrast Theory

Helson, H (1947), American Journal of Psychology

Investigating within the student environment• May get a different relationship between wealth and

happiness among students compared to middle aged adults.

• Use an anonymous questionnaire to gain info such as:• Amount of debt they will be in after graduating• How much money they are given each month from parents• Whether they receive more than the standard loan or any loan at

all

• Use a previous measure for rating happiness/wellbeing such as the GHQ measure.

Evidence that winning big doesn’t lead to a better life or happiness:

• Michael Carroll nicknamed ‘lotto lout’ won £9.7million on the lottery

• Blew all his winnings on drugs, prostitutes and cars

• Been in court over 30 times and jailed for the drug offences

• Now works in a biscuit factory earning £6 an hour

• Claims he is now happier

Papworth (2013)

Conclusions• Evidence for and against money buying happiness• Paper 2 more in favor of Adaptation Level Theory• Paper 1 more in favor of Assimilation Theory – needs to

be longer?• Happiness is very subjective • Maybe it buys happiness up to a certain extent, but there

are other more influential factors that should be considered i.e. marriage

• Maybe if you actually earn the money, as opposed to being handed it (i.e. the lottery), you have a greater respect for it and therefore it makes you happier for longer – further research?

"It is pretty hard to tell what does bring happiness; poverty and wealth have both failed" - Kin Hubbard

“If you want to feel rich, count the things that money can’t buy”

“There are people who have money, and people who are rich” – Coco Chanel

“Wealth without work, one of the seven deadly sins” – Ghandi

“If you realise that you have enough, you are truly rich” – Lao Tzu

ANY QUESTIONS?

ReferencesAknin, L. B., Norton, M. I. & Dunn, E. W. (2009). From wealth to well-being? Money Matters, but less than people think. The Journal of Positive Psychology, 4, 523-527.Brickman, P., Coates, D., Janoff-Bulman, R. (1978). Lottery winners and accident victims: Is happiness relative? Journal of Personality and Social Psychology, 36, 917-927. Diener, E. et al. (2010). Wealth and Happiness Across the World: Material Prosperity Predicts Life Evaluation, Whereas Psychosocial Prosperity Predicts Positive Feeling. Journal of Personality and Social Psychology, 99, 52-61. Dillow, C. (2012, January). Lost money? You should forget about it. Retrieved from:http://www.ezonomics.com/blogs/lost_money_you_should_forget_about_it/Gardner, J. & Oswald, A. J. (2006). Money and mental wellbeing: A longitudinal study of medium-sized lottery wins. Journal of Health Economics, 26, 49-60. Heathfield, S. Women and work: Then, now, and predicting the future for women in the workplace. Human Resources.Helson, H. (1947). Adaptation-Level as Frame of Reference for prediction of psychophysical data. The American Journal of Psychology, 60, 1-29.

ReferencesLivesey, C. & Lawson, T. (2008). Family Households. AS Sociology for AQA. 2; 64-76. Retrieved from:

http://www.sociology.org.uk/sc_shop_pdf/sc_AS4AQA_family_e.pdf

Papworth, A. (2013). Norfolk lottery winner Michael Carroll now earns £6 an hour. EDP 24. Retrieved from: http://www.edp24.co.uk/news/norfolk_lottery_winner_michael_carroll_now_earns_6_an_hour_1_2268736

Swinford, S. (2013, May). Marriage makes people happier than six figure salaries and religion Marriage. Retrieved from:

http://www.telegraph.co.uk/news/politics/10090130/Marriage-makes-people-happier-than-six-figure-salaries-and-religion.html

USA GOV (2003). Achievements in public health: Family Planning. CDC. 48; 1073-1080. Retrieved from:

http://www.cdc.gov/mmwr/preview/mmwrhtml/mm4847a1.htm