Happiness and Rich People

Happiness and Rich People

Are rich people happy? According to Richard Easterlin, an economist who postulated the concept of Easterlin Paradox in 1974 (a key concept in happiness economics), happiness at a national level does not increase with wealth once basic needs are fulfilled.

Esterlin's argument is that people’s desires and expectations change along with their material fortunes. When an American in 1970 may have once dreamed about owning a house, he or she might now dream of owning two. Where people once dreamed of buying a new car, they now dream of buying a luxury model.

“People are wedded to the idea that more money will bring them happiness,” Easterlin said, “When they think of the effects of more money, they are failing to factor in the fact that when they get more money they are going to want even more money. When they get more money they are going to want a bigger house. They never have enough money, but what they do is sacrifice their family life and health to get more money.”

The irony is that health and the quality of personal relationships are among the most potent predictors of whether people report they are happy. – and they are often the two things people sacrifice in their pursuit of greater wealth.

Nobel Prize-winning behavioral economist Daniel Kahneman has found that being wealthy is often a powerful predictor that people spend less time doing pleasurable things, and more time doing compulsory things and feeling stressed,

Money does not equal happiness; at least rich people don’t have financial worries.

Image source: https://hbr.org/2016/06/why-rich-people-arent-as-happy-as-they-could-be