A group of Harvard researchers set out to reexamine the age old adage that money does not buy happiness, and their findings contradict what most of us have always thought and likely would prefer to believe: Money does make people happier.
The study, which was published in Personality and Social Psychology Bulletin, also found evidence that millionaires who earned their wealth were happier than those who inherited it.
“Many people aspire to great wealth, and becoming a millionaire is a commonly used reference for financial success. The question of whether more wealth leads to greater happiness has interested economists, behavioral scientists and the general public for decades,” said study author Grant E. Donnelly, a doctoral candidate in the Marketing Unit at Harvard Business School.
Donnelly explained that common thinking around money and happiness says "wealth matters, but there is diminishing marginal utility". But research at the higher end of income earners is more limited, so his team set out to see if the maxim holds true among millionaires.
“Individuals with high net worth are hard to get data on, and most of the studies investigating the question of wealth and happiness has used nationally representative samples which do not have a large number of wealthy respondents.”
In seeking an answer to their questions, the Harvard researchers surveyed 4,000 millionaires (all reporting a net worth of at least $1 million) in 17 countries, asking about their general happiness as well as their life satisfaction.
The results were somewhat surprising:
Donnelly and his colleagues found that substantially higher levels of wealth — having more than $8 million in one survey and $10 million in the other — were linked to greater well-being.
“The general finding is that more money does lead to more happiness,” Donnelly explained to PsyPost. “So, while we’ve believed before there is diminishing marginal utility, the curve doesn’t diminish as quickly as we once thought — and even when basic needs have been met, acquiring more wealth does increase happiness.”
Also unexpected, Donnelly said how the millionaires acquired their money determined their degree of happiness to a great extent.
“Another surprising finding is that the source of this money is also important for happiness—participants who reported primarily inheriting or marrying into wealth reported less happiness. It appears that those who earned their wealth attach more happiness to it.”
Why might money make people happier?
The researchers believe that wealth might increase happiness by providing a greater sense of autonomy. The more wealth a person has, they argue, the more freedom they have to choose how to spend their time.
Though the results are interesting, Donnelly cautioned jumping to a cause-effect relationship, because it it is possible that inverse is also true: Those who experience greater well-being are more likely to acquire or pursue greater wealth.