I came across an interesting study today by Gardner and Oswald (2007), Money and mental wellbeing: A longitudinal study of medium-sized lottery wins.
In short they tested if people who had a medium sized lottery win (approx. $3,000 - $300,000) were happier. They did the study under quasi-experimental conditions, including creating a sample size large enough to make the findings reliable. In short they found people who won money in lotteries were psychologically happier as a result of their win - even up to two years later.
A financial windfall made people happier. From what I remembered most evidence before this study suggested that people have a rough set point of happiness, and that after a little bit of initial euphoria most people return back to their set point. This study has some pretty significant implications.
Consider the psychological impact K Rudd's Stimulus Package. Even, the most ardent Rudd detractor will have to admit that we came though the GFC with flying results. What has perhaps been underestimated is the impact of not just having an extra $900.00, but how good it felt receiving it. If receiving a financial win fall makes you happier, then the Australian government dished out a lot of happiness in 2009! Unfortunately, the nations happiness is not tracked nearly as accurately as our financial well-being - so the psychological impact of the stimulus package may never be known.
Any thoughts? Agree / Disagree?
Post script: Here's an article I wrote for The Punch, a little longer - but similar theme.
28 comments:
I agree. It seems natural you would be happier if you won money. Why do people try and say the opposite?
Adam, timing is everything. I don't think this guy would agree with your post:
http://media.theage.com.au/national/breaking-news/missing-lotto-winner-mystery-1079311.html
Hi Richard, at least he died happy.
Bwahahahahahahaha!
Adam, that's COLD! (But funny.)
'Enough money' buys happiness. Certainly more than poverty. Anyone who says otherwise has never been poor.
Money can't buy you happiness, but it can buy you things that look, feel and taste exactly like it ;)
Right you are Jemster - see fuller article on it at www.thepunch.com.au Murdoch's online interactive tabloid.
I'd question the conclusions you're drawing from the study, actually.
The conclusion to be drawn is that winning the lottery tends to make you happier; however, there's a lot of variables (the lottery is not played, or won, by a random selection of society - there's a tendency toward the poor, which means people who are made unhappy by lack of money or the things money can buy, for instance), and the fact of winning money is not the only thing that occurs when one wins the lottery - one is proving oneself lucky and one is winning; it is wholly possible that these are the "happiness-increasing" factors, not the money itself.
It looks, then, like you're oversimplifying the study and its conclusions...
Sorry. but this study is in line with the conventional happiness research and does NOT contradict it. Nice try though.
Daniel,
When there is a study reported like this - drawn from research in the psychological literature - published in a reputable journal be rest assured that the study has controlled for as many variables as possible to mitigate correlation, and find a causal link to what's under investigation (in this case winning the lottery leads to being happier).
Without analysing the study your comment - although appreciated, is a little meaningless.
Clf I mean it was out of line with conventional wisdom, and much research.
It also works the other way to.
Last year I tried an experiment. Instead of giving away a few dollars here and there to charities during the year I said 'No' to everything.
Then, in one hit, I gave $1000 to a single person for a single cause. (That's a lot of money for me)
The 'high' from giving a single large amount was definitely a lot more than simply the sum of the previous 'highs' from giving smaller amounts. The 'happiness to money' function is definitely non-linear.
Since it is non-linear like that (in both directions), it seems that there is a really good system for maximising happiness:
1. People donate a small amount of money 'x' into a pot (thus losing 'x' amount of happiness)
2. After 1001 people have donated, we pick someone at random to receive the entire pot.
3. The net result is that a thousand people have dropped their 'happiness' by 'x', and one person has increased their happiness by 'y'.
Now we know that 'y' > 1000 * 'x' (Since happiness is extremely non-linear with money)
So therefore this system causes a net increase in happiness.
This system was actually used in Papua New Guinea in the 1950s - in some places all workers would put their weekly wage into a pot, and someone at random would get everything.
If company did this to pay their employees, another plus side is tax. If the entry into the lottery is a fringe benefit of working, then everyone gets taxed at fringe benefit rates for joining the scheme, yet the lottery win is tax free. So as long as your tax rate is above the fringe benefit rate, you'll come out on top !
Mac
(Who isn't entirely serious with his suggestions)
Adam - It is interesting research but it kinda contradicts the point you make about the Stimulus Package.
There seems to be no statistically significant reduction in GHQ for small wins (less than 1000 GBP), in fact GHQ goes up by almost as much as not winning anything - i.e. winning small amounts does not make you happier. So according to this research, you would not expect the Stimulus Package (which was nowhere near 1000 GBP) to have a significant impact on the recipient's happiness after 2 years.
Now 1000 GBP and 120,000 GBP is a pretty big range - I would want to know if there's a correlation between winnings and reported well-being - but "it proved impossible, probably because of the small sample size relative to the noise in GHQ scores, to find a
statistically significant relationship".
There are also methodological issues with using a survey technique such the BHPS as opposed to a technique such as a day reconstruction to measure actual happiness. Some important points here: http://www.sciencemag.org/cgi/content/full/312/5782/1908?ijkey=IUhrcMA9vdQwI
I completely agree, because it's checked when people has not money the preoccupations and the stress increase radically. Also the money is so useful to cancel doubts and to live a less tough life.
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yes money play the very important role to make our life happier... without money our life is useless in the world....
Regards
Alexa
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Of course money makes you happier. I sure know I'd be a happy camper with a million bucks!
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This is a good question, actually money makes us happy because we can buy all things we want an also we can support all our needs, on the other hand I think that money is useful when we're so sick at the Hospital with a terminal disease.
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