Free «Relationship between money (economics) and happiness» Essay Sample

Happiness is a common term but a concept that most have missed. One of the most conventional definitions refers to "happiness as an attitude towards one's own life, the degree to which a person judges the overall quality of his/her life as a whole in a favourable way" (Bruni & Porta, 2007). Can we measure happiness? The study of happiness relies very heavily on the evidence from a number of surveys and most of these include measures of social background, personality, satisfaction with domains of life, social networks and the economic affluence.

The social life is concerned about inter-personal relations and a very key aspect is absent among the key ingredients of happiness. According to Bruni and Porta, as people's income increases, they tend to be induced to seek continuous and ever-more intense pleasures in order that they maintain a level of satisfaction (2007). A very important question constantly asked is "Does money buy happiness?" It is obvious to have many say yes and no.

Margulis and Punset, state that our spiritual leaders tell us no, while those accredited to be having the answers tell us yes and thus the two answers wrong just by the fact that they are very simple. Money does buy happiness, when it changes one from a state of poverty to the middle class and from that class to an upper class (2007). It is very evident when you visit Mexico City and see people living in dump sites and think that their lives would not change with them having access to some little money.

Money does make a big difference in somebody's life when it changes them to provide them security, food and probably give them shelter. This can be a proven fact since these people end up at certain points not worrying about the weather, or even being hurt or may be about their medical care. This is exactly what we see every single day. The relationship between money and happiness

Times have changed from the many centuries that have passed by, with the concept of happiness directed to reduction of individual sacrifices to a minimum and improvement of the highest possible living standard without anybody being sacrificed. It is then that people have become familiar with principles that greatest happiness for the greatest number should be:

- The measure of right and wrong

- Reasonable and proper purpose of the government

- Foundations of moral and legislation.

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According to Bruni and Porta, this is clearly a social conception of common happiness and different from personal happiness (2007). To the ancient thinkers, a lot of emphasis was not made on the relationship between happiness and wealth as presently being discovered that economic growth does not seem to increase subjective happiness. This apparently is not very truthful according to Bruni and Porta referring to Carlyle, a professor of dismal science, who realized that happiness, is one of the foci of interest for economists and a general belief that "economists believe that happiness must play a more central role in economic science". In the words of Wille, money and wealth, and our attitude in accumulating it, ca be a source of happiness or sorrow. It is therefore very important to understand where the difference lies. According to Wille, studies indicate that poor people are not as happy as people categorized as middle income (2008). This is a confirmation of what Bruni and Porta discuss as explained above.

Happiness depends largely on extra-economic factors that are not wealth in the usual sense, which do not pass through the market, such as religion and true interpersonal relationships such as family affections and friendships. According to Bruni and Porta, happiness considered by Marshall does not coincide with wealth and hence happiness has a social nature. The difference comes when in poverty, it does not necessarily mean unhappiness, and always determines the objective conditions that render very difficult the possibility of developing the dimensions of life and the interpersonal relationships upon which happiness actually depends (Bruni & Porta,2007) A particular case of people who have no money or little money is that money makes them happier. Phillips asserts then that money can make a difference in people and also distinguish between life and death. He provides a simple equation: more money=more Subjective well being. This situation is much more complicated and has to be acknowledged that money, according to Klingermann, accounts for less than 4 per cent in the variance of SWB in developed countries. Broadly, the findings of many researches reveal that two categories; first, those where the unit of analysis is the relationship between SWB and income for each individual person in a country (Phillips, 2006). Secondly, the unit of analysis is the relationship between the average subjective well being of all persons in a country and the country's national income.

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Several times, attempts have been made to explain the weak relationship between economics of money and happiness and to solve the income paradox. It is very clear that many can compensate a considerable health loss with a large amount of money to maintain happiness levels which end up at times unchanged. In multiplicative specifications according to Bruni and Porta, happiness determinants are taken as imperfect substitutes (2007). Many psychologists seem not to understand the link claiming that the relationship does not work well since they concentrate at the proportion of the variance in happiness explained by income in a sample of individuals observed. According to Frank, this does not imply that income is an unimportant determinant of happiness. The reason that income explains such a small proportion of variance in the happiness data is that the data obtained are noisy due to many other factors besides the income that matter a great deal t explain how happy people get to become (2007).

Rowley asserts that even though the studies on the relationship are intriguing, sometimes conflicting insights into this relation is a result. One conclusion is universal: A certain amount of money does indeed make people happier. According to Rowley, people who live in wealthy nations are happier than those in underdeveloped or developing nations. It is a proven fact that everyone enjoys life a little more when they have enough to eat, clothing and well kempt with a place to sleep (2005). According to Warr, the availability of money makes certain significant differences and improvements in peoples' lives. The financial pressures during unemployment and retirement have been considered and thus the importance of money for happiness can be clearly seen. When a person's family requirements exceed their financial resources or input, then the result is activities and pleasure curtails, and small changes either need or resources can generate significant problems (2007). For instance poor people are liable to pay more than others for equivalent goods or services; bulk purchases for household items at reduced costs are impossible for the persons that lack sufficient money; a car to these people is not available for travelling. Hence, generally, shortage of money means that payments of some bills are possible only if other items are unpaid or not included in their budgets or struck off their budgets, and maybe debts could accumulate to a level that provokes substantial anxiety.

The fact that currently money is so much pegged to happiness or subjective well being implies that the state of the incapacitated financially would affect other environments such as:

- Reduction of opportunity for personal control in activities that require money

- Inhibition of skill usage in hobby or educational activities

- One becomes less of an achiever due to lack of financially resources even if they have skill and knowledge

- Social contact may be reduced through the inability to pay for travel or entertainment

With a close look at these factors, money has some considerate indirect control as well as direct effects on happiness. Warr says that it is important due to what is makes possible with regard to other environmental features and also for its own immediate benefits (2007). A lot of money may buy a little extra happiness, as one would ask anybody randomly, is the response most people would definitely receive. Psychologists and other social scientists have also done a number of tests and many have come to the conclusion that relationship between money and happiness is much weaker that one or most people generally expect. The most common conclusion has been that beyond a subsistence income, money as well as happiness is essentially uncorrelated (Taylor, Harrison & Kraus, 2008). The fact that one is not capable of paying their bills does mean that probably there would be a significant amount of unhappiness, but after that period, it generally has been thought that more money does not quite make people happier. An example is winners of lottery, often they feel a brief surge of happiness after the win, but they generally return to their zones of comfort or discomfort within some period of about a year.

Using money wisely could be a significant way or key to transforming more money into happiness; secondly, ensuring that money is the result of pursuing one's passion, and not an end in itself. According to Taylor et al, research has shown that people who aspire to wealth and material possessions at the expense of all other goals tend to be less happy and are less satisfied with their lives or achievements while they also end up suffering more depression and anxiety (2008).

In conclusion, the weak link in the relationship could be the result of using reported income as a measure of economic well being and recommends that constructions of a comprehensive measure of the well-being should account for happiness. According to Bruni and Porta, perhaps the lack of a strong relationship between happiness and money could also be explained by the role played by culture and values in people's lives. They state that in some cultures, success may be defined by the amount of money or wealth one has. Depending on the intrinsic values, a person might define happiness in terms of money and thus be unhappy if they consider the amount of wealth or cash available to them as insufficient. Money has to be considered a by -product of professional activity including passion, enthusiasm and knowledge of the subject that will result into success. The goal must therefore not be about money but learning, adventure, fun and sharing. It must be accepted that even with high levels of personal happiness, the wealthy have not been immune to the emotional recession due to a number of effects countries experience and also the economic slowdowns. The important thing is the consideration of the fact that money makes life easier and the sense of satisfaction come from a sense of achievement and successful pursuit of a business idea. The money people get, came with the success, but were not the original objective.


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