Can Money Buy Happiness?

Academically speaking, the answer to this question has, for a long time, been no. This is because of something called the Easterlin paradox – the theory that economic growth in a country does not result in greater happiness for citizens of that country.

But the theory is being challenged.

This week, writing in the Telegraph, Allister Heath cited two new academic papers that claim to disprove the Easterlin paradox. Both papers suggest that increased wealth does result in increased happiness.

The first paper cited by Heath is The New Stylized Facts about Income and Subjective Well-Being by Sacks, Stevenson, & Wolfers. This paper uses data on citizen’s life satisfaction from the Gallup World Poll and compares it against a measure of average income (real GDP per capita). The authors find that wellbeing does in fact rise with income. Moreover, the data show that the correlation stands within single countries, across countries, and over time.

The paper concludes with five “stylized facts” that include findings such as, “richer people report greater wellbeing than poorer people” and “richer countries have higher per capita well-being than poorer countries.”

The paper also offers an explain of why Easterlin came to the conclusions that he did in the 1970s: namely lack of data.

…[Easterlin] failed to find a statistically significant relationship between wellbeing and GDP …There was simply too little data to have the precision necessary to reach a conclusion in either direction.

The second paper cited in Heath’s article is The Easterlin illusion: economic growth does go with greater happiness by Ruut Veenhoven and Floris Vergunst.

This paper also finds that wellbeing rises with income. The authors reveal a positive correlation between GDP growth and a rise of in happiness in nations. They go on to say that both GDP and happiness have gone up in most nations, and average happiness has risen more in nations where the economy has grown the most.

So that’s it then. Money can buy you happiness after all. Or can it?

There remains a discussion as to whether disproving the Easterlin paradox is as simple as the two papers suggest. For example, wellbeing expert Carol Graham argues that it depends on the question that is asked in the survey.

Graham draws a distinction between life evaluation data and life experience data. Happiness data that capture citizens’ life evaluation correlate more closely with income compared to happiness data that capture life experience. This point is made by Daniel Kahneman and Angus Deaton here.

So can money buy happiness? It seems the jury is still out. Academically speaking, anyway.

 

**More on this, including helpful summaries and useful context, can found here and here.

 

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Heaven is Real

It isn’t often that one of the world’s leading global affairs magazines publishes a cover story like that. But this week’s edition of Newsweek magazine features, as its lead article, a first-hand account of Dr Eben Alexander, a neurosurgeon who “experienced something so profound that it gave me a scientific reason to believe in consciousness after death.

The entire article is worth reading – whether or not you believe in life after death – but here are a few extracts that stuck out for me:

Very early one morning four years ago, I awoke with an extremely intense headache. Within hours, my entire cortex—the part of the brain that controls thought and emotion and that in essence makes us human—had shut down…I had somehow contracted a very rare bacterial meningitis that mostly attacks newborns. E. coli bacteria had penetrated my cerebrospinal fluid and were eating my brain…

While the neurons of my cortex were stunned to complete inactivity by the bacteria that had attacked them, my brain-free consciousness journeyed to another, larger dimension of the universe: a dimension I’d never dreamed existed and which the old, pre-coma me would have been more than happy to explain was a simple impossibility…

…as far as I know, no one before me has ever travelled to this dimension (a) while their cortex was completely shut down, and (b) while their body was under minute medical observation, as mine was for the full seven days of my coma…

Toward the beginning of my adventure, I was in a place of clouds. Big, puffy, pink-white ones that showed up sharply against the deep blue-black sky. Higher than the clouds—immeasurably higher—flocks of transparent, shimmering beings arced across the sky, leaving long, streamer-like lines behind them.

A sound, huge and booming like a glorious chant, came down from above, and I wondered if the winged beings were producing it…

And the article continues.

Dr Alexander writes as a man still trying to work out the meaning and consequences of his experience. Still battling with reason and science, trying to see how this experience fits in with his understanding of the world.

To me, the most fascinating thing about this story is it’s unlikely hero. Dr Alexander is not a religious zealot looking for validation of his beliefs, he’s not an evangelist, or even a very strong Christian (in his own words, he is a Christian “more in name than in actual belief.”). And this makes his account all the more interesting.

I wish him well. I hope he writes more about it so that we can know how he gets on.

*Update: I notice that the Daily Mail has covered this story today.

*Update 2: And there is a book in the pipeline too.