More money means more happiness?

There was an interesting piece in the Age last week called "Loads of money: it's the route to all happiness."  In it, economics writer Peter Martin contends that new data comparing self assessed measure of happiness with GDP per person shows an extremely high correlation between more dollars and more happiness. Moreover, there doesn't appear to be a satiation point - doubling income doubles happiness, and so on, without surcease. The correlation is reported to be 0.8 (80%), which, in statistical terms, is very, very high.

The first and most obvious thing that struck me in reading this piece, which seems to contradict the established wisdom that, past a certain point of material comfort, extra wealth does not increase happiness, is that it's making a few unverifiable assumptions. GDP is a measure of a country's income, after all; dividing GDP by the number of people in the country (which is how GDP per person is arrived at) does not actually tell you either the median or the mean, nor, importantly, does it tell you how many people are significantly above or below that number. GDP per person doesn't tell you how much actual money any given person has in a society.

Secondly, it's reasonable to suppose that a society with high (and rising) GDP might possess other factors that contribute to happiness aside from how much actual cash individual people have. Rich countries, in GDP terms, tend to have reliable and universal access to clean water and electricity, for instance. They tend to have mass transportation systems of greater or lesser functionality and good quality healthcare (as to how accessible it is is, well, that's a cat of another colour). They strongly tend towards public education systems, and on the whole - I realise there are exceptions here - are not war zones, so the daily mortal danger quotient is substantially reduced.

Whether these things come about because the country is rich, or whether the wealth is enabled by these factors, is one of those unanswerable questions (at least by me), and it's immaterial for the purposes of this argument. The point I'm trying to convey is that high national GDP lines up with a range of social conditions that are likely to make all the individuals within that country happier, irrespective of their personal share of the pie.

Nonetheless, even if this point is conceded, the data does seem to support the notion that individuals assess their personal happiness more highly if they have more money.

I wonder if these means, though, that "money buys you happiness" per se, or, rather, that money removes some of the primary impediments to happiness that affect many people's lives. Not being able to feed yourself or your family will negatively affect your happiness. Having nowhere to live and no relief from extreme climates (ie no access to heating or cooling) will negatively affect your happiness. Being sick or in pain will definitely negatively affect your happiness, especially if your suffering could be relieved but simply isn't being because of lack of money.

At a less basic level, it's true - in my experience - that having access to more money relieves anxieties about resources in a way that does make the day-to-day business of living less stressful. When you don't need to fear the unexpected bill or the exploding appliance, when you can indulge in small material luxuries without considering the consequences, it makes life more relaxed on many levels. And, yes, it does make things more enjoyable, in that surface but not irrelevant way that gives you that tiny little endorphin spike that drives discretionary consumption.

For us, we have only reached this point really in early-mid 2012, since I have been working more hours (once my freelance consultancy really got going, and the past 7 months in my fulltime job). It's not that we can now afford our own Lear jet and mansion in Brighton, but rather that I can get my nails shellacked every 4 weeks if I want to and not count the cost; that we can fix up falling-apart bits of our house without extending credit; that we can plan and take bigger family holidays, etc etc.  In other words, there is more softness in our everyday from a material viewpoint that there was in the past, and this is not, it must be said, a terrible thing.

All of that said, and not denying that our level of incomes has made our lives less financially stressful and replete with small material pleasures, I do not believe that having more money has made us happier in a deeper sense. While we have more money now (and therefore more indulgences, can contribute more to causes that we believe in, and much less anticipatory stress about financial disaster), we have traded this off for the other kinds of stress that come with doing two fairly senior level jobs while raising three children. We are much *more* stressed about logistics, performance and time management than we were when I worked considerably less. I, in particular, worry that we are not making the best decisions all the time for our children, and that they are getting less of us than they should.

These anxieties and stresses do not make me unhappy ALL the time - any more than feeling stressy about bills made me unhappy all the time when I worked 10 hours a week and every envelope in the post was a crapshoot. Some days, though, they do affect my overall happiness negatively, and I'd be lying if I said they didn't.

Bottom line - I don't think money is the root and cause of all happiness. I think happiness is a composite of basic material needs being reliably met; sufficient and positive affective bonds to nurture the social being; access to bursts of pleasure-inducing "treats" (be they experiences, goods, or whatever); the ability to pursue fulfilling occupation (whether it be paid or not); safety, stability, health, luck, and the alignment of the stars. I think not having enough money to meet your needs will definitely make you less happy most of the time, because being poor is stressful and socially stigmatised and ruthless in its denial of those tiny starbursts of endorphin that the materially unchallenged can give themselves without thought. But I think that money alone is not enough to make you happy, and that, moreover, everyone will experience unhappiness sometimes, and that is actually OK.