June 9, 2021

Happiness Equation & Money

If i say money can buy happiness, most of you all will think- what kind of acquisitive person i am? But analyzing deep down in this topic will make you realize that happiness is indeed positively correlated with wealth. As income rises, money may become less important part of the happiness equation but for the low income individual, money is a crucial reason to be happy because it enables them to buy basic necessities– food,shelter and clothing but there is believed to be a threshold after which any additional money does not increase the satisfaction just like the basic ice cream examples. If ice creams are given free of cost, how much will you consume? Knowing the fact that you cannot eat unlimited, you will consume the ice cream till the point where the satisfaction you derive from it is positive. The moment you will realise an additional one will give you a negative satisfaction, you will stop consuming just like the moment you know you have too much money, the satisfaction you’ll get from it will decrease.

According to the world happiness report of 2018, Finland topped the chart of the happiest countries of the world whereas India is on 133rd rank making its place amongst the least happy nations. The top variables explaining this global happiness are- GDP per capita, healthy life expectancy, social support, freedom of choice etc. even though money has topped this list, social indicators too play a vital role in a person’s happiness. Money alone can’t do anything, as per the research the countries that make to the top tiers of being happier are the ones with less social issues- low income inequality, low gender related issues, freedom of choice of individuals and many more. If you’re in trouble and you have closed ones to count on, if you are in good health, if you can live a life of your choice, you are more likely to be satisfied and if you know economics you know the happiness here is measured with the amount of satisfaction. 


Does income/money/wealth and happiness go together? Is it rightful to say that money till some extent buys happiness? Yes, indeed yes. The above graph shows the positive correlation between the average income in countries and average life satisfaction.  The findings are- richer countries tend to be happier than poorer countries and richer people within countries tend to be happier than poorer people in the same countries.

Knowingly or unknowingly, people have been measuring happiness from money since ages like when we think of a developed nation, we think of a happier picture just because their per capita GDP is far more greater than us but that is not true. There are some developing nations with lower wealth but are happier and that is why economists are pressuring to take happiness as an index to measure the exact development of the nations. For example- , the Smart Dubai Office launched their Smart Happiness Index earlier in 2018, which promises to assess the performance of their city managers based on happiness gain per funds spent. Happiness is the observable behavior and even though money can buy you that, there are for sure other ingredients to this recipe and according to me, a human is truly happy where his mind is without fear and the head is held high.

14 thoughts on “Happiness Equation & Money

  1. Nice post and happy to find you on my site! Thanks for following me. I am now following you. There is a lot here in your writing. Basic needs must be met with food in the belly and a roof over our heads are essential for meeting our needs for fulfillment for sure. The flip side can be a lot to manage and being a slave to our material goods. Good food for thought!

  2. Does your blog have a contact page? I’m having trouble locating it but, I’d like to send you an e-mail. I’ve got some ideas for your blog you might be interested in hearing. Either way, great site and I look forward to seeing it develop over time.

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