Money’s Contribution to Happiness is Overrated
Thu, December 10, 2009 at 03:00AM It’s true – as is often said, money can’t buy happiness. But think of the way intangible losses, such as pain and suffering, are compensated in legal decisions. Now British psychologists, writing in the journal Health Economics, Policy and Law, have reported their findings from a comparison of ways of treating impaired mental well-being.
Analysis of the outcomes of over 1,000 cases of psychological distress showed that many could be improved by a 4-month course of psychotherapy. Other cases responded to financial compensation – lottery wins or pay increases. The results showed that a course of psychotherapy could be at least 32 times more cost-effective than financial compensation. Thus a 4-month course of treatment, costing $1,330, would take a pay raise of at least $41,540 to achieve an equivalent boost in well-being.
Chances are that the reason for this effect is that in psychotherapy treatment the victim is required to make some considerable effort over time to improve her/his situation. It’s an active process (with help from the therapist), whereas a Lotto win or pay raise is much more passive. As with many problems, effort is required (think diet pills versus calorie restriction and/or exercise).
Reader Comments (1)
Hi,
Interesting thoughts! I believe it’s not possible to make a general statement on whether money makes people more or less happy.
Money comes with a whole set of new elements that may have good or bad impact on our happiness, and depending on how susceptible we are to every one of them, the conclusion will go one way or the other (i.e. different from person to person). I recently made an effort to provide a more comprehensive picture of what these ad- and disadvantages are. I invite you to have a
look at Money and Happiness and tell me what you think!
Thank you, Nick