Money makes you happier – but only if you really think about it, according to research from the London School of Economics and Political Science.
Until recently, most economists and policy-makers subscribed to the view that individual well-being increases as we earn more money. This new research, published in a recent volume of the British Journal of Social Psychology, strongly suggests that earnings only affect happiness when financial matters are on your mind.
The findings are based on two tests which measured how a person’s earnings and social ties influence their sense of well-being in different circumstances.
In each test participants were, unknowingly, primed to think about either financial issues or ‘community’ issues, such as their home-life, family or friendships. The researchers found that when put in a situation where they were more likely to think about financial issues–for example, after solving word puzzles relating to money - there was a link between participants’ income and how satisfied they said they were with life.
When participants were set-up to think about community or family issues their earnings had no effect on their well-being. Money also had no effect on well-being in control tests, when no particular issue was made relevant.
A person’s social ties, on the other-hand, had a consistent effect on happiness. People who have more links with friends and family tend to be happier in all circumstances - whether or not they are thinking about money or community issues.
This paper coincides with recent news that the UK has dropped down to 18th in the OECD’s Better Life Index*, a tool used tomeasure life satisfaction in developed economies.
Dr Ilka Gleibs, lecturer at the London School of Economics and Political Science, and co-author of the research, commented:
“Earning more money can make people feel better but only under the right circumstances. Strong friendships and family are much more consistent in providing people with feelings of well-being than higher earnings.
“If the UK government genuinely wants to promote the well-being of the population, and move up the OECD’s happiness league table, it would do well to initiate policies which help foster community relations. Economic growth is clearly vital for the country overall… but it is not necessarily the key to individual happiness.”
Notes to editors
*THE OECD Better Life Index was published in May 2013 and is available here:http://www.oecdbetterlifeindex.org/topics/life-satisfaction/
To read the full research paper see: Unpacking the hedonic paradox: A dynamic analysis of the relationships between financial capital, social capital and life satisfaction . This was published in the Journal of Social Psychology in March 2013.
The paper’s authors are:
Dr Ilka H. Gleibs, lecturer in social and organisational psychology, London School of Economics and Political Science;
Dr Thomas A. Morton, senior lecturer in psychology, University of Exeter;
Dr Anna Rabinovich, lecturer in psychology, University of Exeter;
Professor Alexander Haslam, professor of social and organizational psychology, University of Queensland
Professor John F. Helliwell, emeritus professor, University of British Columbia.
12 June 2013