Happiness researchers are constantly asking whether money can buy happiness, and the research suggests that the answer is yes—but up to a point. Once a person’s basic needs are comfortably met, more money doesn’t necessarily make people happier—and at some point it can lead to a decline in the pleasure one takes from life.
Now we have perhaps the most comprehensive study of happiness vs. external circumstances ever undertaken: two British researchers have examined millions of books and newspaper articles published since 1820 in four countries—America, Britain, Germany and Italy—and they found that wealth is not the most important factor in the happiness equation.
The simplest summation of what they found is similar to what researchers found before: that basic needs are a key to rising happiness. By comparing aggregate happiness against history, they found that certain time periods were “happier in aggregate” than others—and that periods of aggregate unhappiness came during times of economic and sometimes physical pain—including wartime, market crashes, revolutions and steep depressions.
Per the findings, the U.S. appears to be climbing out of a deep trough of relative unhappiness; indeed, for the past 40 years, people appear to have been less happy, in aggregate, than they had been during the Second World War—until quite recently. The war in Vietnam and the market downturn from 1973-75, plus stagflation seems to have started this less than joyful period. Looking abroad, people in Britain were generally happier during the Victorian era than they have ever been since, and, predictably, the European countries saw a decline in overall happiness during World Wars I and II—and a sharp recovery in happiness took place when the wars were over.
The good news is that people are relatively as happy today in the U.S. as they have ever been.
This article was written by an independent writer for Brewster Financial Planning LLC and is not intended as individualized legal or investment advice.