Why Money Doesn’t Buy Happiness – Economists and psychologists—and the rest of us—have long wondered if more money would make us happier. Here’s the answer.

“All in all, it was probably a mistake to look for the answer to the eternal question—”Does money buy happiness?”—from people who practice what’s called the dismal science. For when economists tackled the question, they started from the observation that when people put something up for sale they try to get as much for it as they can, and when people buy something they try to pay as little for it as they can. Both sides in the transaction, the economists noticed, are therefore behaving as if they would be more satisfied (happier, dare we say) if they wound up receiving more money (the seller) or holding on to more money (the buyer). Hence, more money must be better than less, and the only way more of something can be better than less of it is if it brings you greater contentment. The economists’ conclusion: the more money you have, the happier you must be.

Depressed debutantes, suicidal CEOs, miserable magnates and other unhappy rich folks aren’t the only ones giving the lie to this. “Psychologists have spent decades studying the relation between wealth and happiness,” writes Harvard University psychologist Daniel Gilbert in his best-selling “Stumbling on Happiness,” “and they have generally concluded that wealth increases human happiness when it lifts people out of abject poverty and into the middle class but that it does little to increase happiness thereafter.”"*

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