The Psychology of Everyday Life: Motivation and the Search For Happiness

The Psychology of Happiness

Does money make us happy?

Some research shows that people with higher incomes are happier than those with lower incomes, but other studies suggest that money has little effect on happiness. An ingenious 2006 study by Wendy Johnson and Robert Krueger sheds some light on these confusing findings. In their view, the objective amount of financial resources is less important than the subjective perception of financial status. In a study of 719 twin pairs, Johnson and Krueger found that people’s perception of their financial circumstances—that is, whether they believed they had enough money—had only a modest relationship with their actual income and assets. Likewise, their satisfaction with their life was far less related to actual prosperity than to perception of prosperity. In other words, the degree to which people felt satisfied with their life had less to do with how much money they actually had and more to do with their beliefs about how much money they had—i.e., feeling that they had enough money.

