Tuesday, August 10, 2010

The Money/Happiness Riddle Solved

What percentage of people believe survey results?

Personally, I am skeptical about the proliferation of research purporting to tell us what people think. To me, it is not so much an aid to strategy as a substitute for it. We need to be cautious not to read too much into data when we don’t understand the context or methodology, or we don’t take a hard look at who is paying for it!

But, once in a while, a survey throws up some interesting tidbits – and so it is with the mammoth Gallup World survey that was conducted in 2005-06 and partially released in early July in the Journal of Personality and Social Psychology (Diener, Ng, Harter, Arora). Gallup conducted 136,000 phone interviews in 132 countries in a bold attempt to resolve the “does money buy happiness?” conundrum once and for all. Except that it didn’t – at least not with the clarity Gallup may have hoped for.

Instead, the findings pointed to a clear distinction between two kinds of happiness.

When assessed against long-term measures of happiness – “I am meeting my life goals and living a successful life” – there is a strong correlation with material wealth or lack thereof. People who are well-off financially tend to feel pleased with how their life is going; poorer people are generally dissatisfied.

But day to day happiness – “I am feeling happy today” – is weakly correlated with how rich or poor you are. In other words, whether or not you wake up happy tomorrow morning will be far more influenced by the quality of your relationships and your level of job satisfaction than the weight of your wallet.

Another way to look at these findings is that money buys theoretical happiness but not actual well-being. While it is good to feel satisfied about your healthy bank balance, it is surely just as important to actually live a happy life in the moment.

Gallup made a lot of phone calls to settle on a rather obvious conclusion: money does not buy happiness, at least not on its own. But this is not an either-or proposition. Material wealth brings abundant pleasure and satisfaction, but only when it comes hand in hand with those things that make life worthwhile to begin with: friendship, family, work, love and passion.