Can Money Buy Happiness? (Money Magazine)

Can Money Buy Happiness? asks a Money Magazine article reprinted on the Forbes website. Among the obvservations:

The new science of happiness starts with a simple insight: We're never satisfied. "We always think if we just had a little bit more money, we'd be happier," says Catherine Sanderson, a psychology professor at Amherst College, "but when we get there, we're not." Indeed, the more you make, the more you want. The more you have, the less effective it is at bringing you joy, and that seeming paradox has long bedeviled economists. "Once you get basic human needs met, a lot more money doesn't make a lot more happiness," notes Dan Gilbert, a psychology professor at Harvard University and the author of the new book Stumbling on Happiness. As the graphic at left shows, going from earning less than $20,000 a year to making more than $50,000 makes you twice as likely to be happy, yet the payoff for then surpassing $90,000 is slight. And while the rich are happier than the poor, the enormous rise in living standards over the past 50 years hasn't made Americans happier.

(emphasis added)

Interestingly, the recommendations to improve your happiness involve spending money, but with preference to certain expenditures over others:

SMALL PLEASURES

LATTE

Don't discount the satisfaction you can get from something as trivial as a good cup of coffee. Furthermore, casual encounters with familiar people like the barista at your local Starbucks or the guy at the newsstand have a bigger effect on your happiness than you might realize.

UPDATE 8/9/2007: Meanwhile, many financial advisor target this "Starbucks" factor as the first area to cut spending to get one's finances in shape. See, for example:

Every Penny Counts by Christine Haughney, New York Times, 7/29/2007;

Creating an emergency fund by Cheryl Allebrand, Bankrate.com, 7/23/2007:

Q: The solution I've heard most often to cut corners and start saving is giving up coffeehouse coffee. I'm not sure how caffeinated authors think we are, but is that really the solution -- give up the demon drink and you'll be financially secure? Or do you have some advice for tea drinkers?

A: I think one of the keys to financial security is about seeing what money's coming in and going out. That's where the latte factor comes in. Do you have to focus on every latte? No. See what your committed expenses are -- including taxes and the six things you have to pay every month like utilities and car payment -- and try to limit them to 60 percent of your total gross income. Look at savings: Invest 20 percent in long-term savings (education, retirement) and then you have 20 percent left. Ten percent is for your emergency fund. You never know when the boiler's going to break. That's where emergency money comes in. The 10 percent that's left is fun money, this is what partners divvy up -- 5 percent each. If you don't have 5 percent that month, you don't have the fun.

(interview with Sharon Epperson)

Africa the Worst Contient for Mothers, Children

According to a recent Save the Children study, Africa is the worst place on Earth for mother and children.  As reported by ABC News:

Scandinavian countries sweep the top rankings for the best places to be a mother, while countries in sub-Saharan Africa dominate the bottom tier, the report said.  Out of the 10 worst countries to be a mother or child, seven are in Africa.

In Sweden, which tops the list, nearly all women are literate.  In Ethiopia, only 34 percent of women are literate.  A mother in Ethiopia is 37 times more likely to see her child die in the first year of life than a mother in Sweden.

The United States ranked 11th. ...

"The Mothers' Index clearly shows that the quality of children's lives is inextricably linked to the health and education of their mothers," MacCormack added.  "In countries where mothers fare well, children fare well; in countries where mothers do poorly, children do poorly."

The low-ranking African countries identified by the study are of course poor and the Scandinavian countries that outrank them are comparatively wealthy.

Study: Wealthier Nations Generally Happier

Wealthier nations are generally happier ones; and, although the correlation is far from one-to-one, it is quite striking overall.

The study by Ronald Inglehart and H-D. Klingemann, "Genes, Culture and Happiness," MIT Press, 2000, compared GDP versus the mean percentage of the population subjectively happy with life as a whole, as determined by surveys.

The richest nations, the United States and Switzerland, in that order, had average happiness levels of 85% and above.  The poorest nations, Nigeria and Bangladesh, respectively, had happiness ratings of around 75%, though these nations were actually anomolies -- most nations with comparable wealth levels ranked lower on the happiness scale, as examination of the chart shows.

It is perhaps not surprising that the happy and prosperous countries also tend to be democratic with free markets.

See also Wealth and Happiness Don't Necessarily Go Hand in Hand, Wall Street Journal 8/13/04 via Van Sloan (sq.4mg.com).