Money and happiness

Rémy Bellaunay, Alberto Prati, and Christian Krekel

Abstract

Many people believe that earning more money would bring more happiness into their lives (Aknin et al, 2009). However, despite massive improvements in material living conditions in most Western countries, average population happiness has stagnated for decades (Layard et al, 2010). This raises an evident question: does money bring about happiness?

The answer is ‘yes’, but far less than most people would think, and with strings attached. Herein, we review the state of the literature after half a century of empirical research on income and happiness. We will use the term “happiness” to refer to the evaluative component of subjective wellbeing, in particular measured as self-reported life satisfaction, and explicitly state whenever we are referring to the affective component.