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Autor: anton 11 November 2010
Words: 1366 | Pages: 6
Wealth makes people happy.
This is a statement that, for many centuries, people took for granted. And my thought is
that the majority of them still believe in it even now. One of the main reasons for that, at
least in the modern times, is the image of happiness that is promoted everywhere in the
We are 6 billions of customers and that is why we Ð²Ð‚?have toÐ²Ð‚â„¢ be persuaded to buy. And
what is the best motivator the advertisers use in order to make us purchase a certain
thing? Ð²Ð‚?Buy our product and you will be happyÐ²Ð‚â„¢. Even though now this message is not
that explicit, it is not very difficult to infer it after watching the commercial/seeing the
newspaper ad. Suddenly, everyone starts smiling and enjoying themselves and every
frown and grimace disappears. They are happy. And all this thanks to the new brand of
orange juice Ð²Ð‚â€œ Ð²Ð‚?with up to 20% pulpÐ²Ð‚â„¢.
When you put the words Ð²Ð‚?buyÐ²Ð‚â„¢ and Ð²Ð‚?happyÐ²Ð‚â„¢ in the same sentence and keep it in mind for
a while, it does not take too much time until you notice that in order to be happy you have
to have money. But still that is not enough - theyÐ²Ð‚â„¢re quite useless if you just own them.
YouÐ²Ð‚â„¢ve got to $pend them.
We can then conclude that, in a consumer society like the one we live in, people use this
correlation between wealth and happiness as their motivation to work more and to
acquire a big number of material goods, thinking this is the best (if not the only) way to
increase their subjective well being.
Previous findings have shown that rich people are, on average, not happier than the rest
(nor the poor are less happy) and consequently, material wealth is not such a strong factor
to influence peopleÐ²Ð‚â„¢s subjective well being.
Lately people have become more and more interested in studying the determinants of
happiness and how they could maximize their effects.
One of the most renowned researchers in this new field is Baron Richard Layard, a
previously well-known economist that decided to concentrate his attention on the study of
happiness, being one of the pioneers of what it is called Ð²Ð‚?Happiness ResearchÐ²Ð‚â„¢
In his book, Ð²Ð‚?Happiness Ð²Ð‚â€œ Lessons from a new scienceÐ²Ð‚â„¢, he looks at peopleÐ²Ð‚â„¢s Ð²Ð‚?subjective
well beingÐ²Ð‚â„¢ from a very practical perspective. The book is divided into 2 parts: Ð²Ð‚?Part one
Ð²Ð‚â€œ The problemÐ²Ð‚â„¢ and Ð²Ð‚?Part 2 Ð²Ð‚â€œ What can be done?Ð²Ð‚â„¢ and tries not only to identify the issues
people have while pursuing their happiness but also to give answers to those concerns.
Throughout the book, some of the chapters deal with the matters of economics or money
and wealth and their effects on happiness. Out of them, the fourth one, Ð²Ð‚?If youÐ²Ð‚â„¢re so rich,
why arenÐ²Ð‚â„¢t you happy?Ð²Ð‚â„¢ is the most important from the perspective of the present paper. It
mainly deals with the matter of income and how its perception and variations influence
peopleÐ²Ð‚â„¢s happiness. The chapter is well structured, offering quite a number of examples
of real-world studies and surveys with empirical evidence for what the author is saying.
But we must not forget that this is a book for the masses and it aims at being easy to
understand by as many people as possible and that is why we cannot require of it to have
the rigor of a real scientific paper.
In the introduction, to illustrate the point he tries to make throughout the chapter, the
author asks the reader to choose between two imaginary worlds, one in which he could
earn more, on an absolute scale, but less compared to other people, and the other in which
exactly the opposite was true. The answer to this question is the key to making sense of
the whole first part of this chapter Ð²Ð‚â€œ people are happier when they earn more than
neighbors or friends. People compare themselves with their neighbors and their friends,
but also with what they are used to getting.
Moving one to the next part of the chapter, Ð²Ð‚â„¢Social ComparisonÐ²Ð‚â„¢ the author leads us even
deeper in the concept of relativity he began to illustrate in the introduction. Using very
inspired examples he shows how it is only our perception of things that determines
whether we are more or less happy.
It talks about reference groups and how a shift in this aspect of our life can change a lot
in our happiness, giving the example of East Germany after 1990, when instead of feeling
better because their wages went up, people started comparing themselves with the West
Germans and the opposite effect was recorded. Another interesting finding presented in
this part of the chapter is the fact that a rise in other peopleÐ²Ð‚â„¢s income has a negative
impact on the happiness of an individual who was not subject to the rise. Following this
path it can be said that the harder the one works and raises his income, the unhappier he
makes other people, and that is why the author uses the term Ð²Ð‚?pollutionÐ²Ð‚â„¢ for comparison.
But this only applies for income and not for leisure time, because next we are presented
with a study saying that people choose the biggest absolute value (over the relative one)
in terms of vacation days.
Afterwards, the reader in shown why, due to several factors, the most important being the
psychological process of adaptation, he will most probably never reach happiness through
material possessions and that is why he is encouraged to seek for it in other aspects of his
life (such as sex, marriage or friends).
The next section deals with the work-life balance and illustrates using the comparison
between Europe and US that having a balanced life and enough leisure time to spend with
the family and friends is very possible to be the key to happiness.
The last part of the chapter looks at inequality and gives the reader a brief description of
how some extra income gives less benefit to the rich as compared to the poor. It is also a
comparison between a number of societies with different levels of inequality.
The end of the chapter brings the reader the 2 recipe of happiness: Ð²Ð‚Ñšenjoy things as they
are, without comparing them to anything betterÐ²Ð‚Ñœ and Ð²Ð‚Ñšfind out which things really make
Baron Layard is one of the first researchers in the field that introduced the hedonic
treadmill principle when talking about happiness. People Ð²Ð‚?runÐ²Ð‚â„¢ after their goals thinking
that achieving them would bring them a lot of well being but it is actually the Ð²Ð‚?runningÐ²Ð‚â„¢
that has this effect. If we stay and think about real- world cases to illustrate that, it does
make a lot of sense. There are countless examples of people that already accumulated so
many riches that not only them, but even their grandchildren would not be able to spend
in their lifetimes, but they are still struggling to make as much profit as possible from
their work. Their goal is not to be rich Ð²Ð‚â€œ they just enjoy the way they do that. So one
conclusion could be that Ð²Ð‚?it is not the destination that matters the most, it is rather the
Thinking about how wealth influences happiness in more analytical terms, we can say
that in our day to day life it is quite important. Even if a substantial increase in oneÐ²Ð‚â„¢s
earnings causes a growth in his subjective well being on the short term, it is a proven fact
that people adapt to the environment very easy and after a time period (varying from a
few months to a couple of years) they return to the initial level Ð²Ð‚â€œ which some argue that is
genetically determined. Although we keep this in mind, we cannot forget about the fact
that when talking about extreme cases things are somehow different, because a little more
extra money is more important for the poor than it is for the rich. For those who can
barely afford to buy the food they need from their income, an extra $ 100 / month means
something else than for someone who earns $ 10000 and this difference is also reflected
in the amount of well being this $ 100 brings to them.
In the end, we can conclude that, except for the extreme cases, more money is not that
important for our well being as it is largely believed and, as can be inferred from the
Layard book, we should concentrate on other things in life, that really matter (such as sex,
friends and family) because by manipulating them we can get closer to the happiness we
Layard, R. (2005), Ð²Ð‚ÑšHappiness Ð²Ð‚â€œ Lessons From a New Science,Ð²Ð‚Ñœ New York: The