Does Money Buy Happiness?

Chatterbox is mesmerized by a cover story in the March 15 issue of Fortune on how Bill Gates, the world’s richest man, invests his money. According to Fortune, Gates’ Microsoft stock is worth $76 billion. That money is, of course, invested in Microsoft. But another $11.5 billion in pocket change, managed by someone named Michael Larson, is scattered between Gates’ two foundations ($6.5 billion) and his personal investment portfolio ($5 billion). The latter alone is “roughly the same size as the Fidelity Value fund, a big mutual fund with 412,000 shareholder accounts.”

But is Gates happy? Chatterbox suspects he is, and he suspects at least in part it’s because Gates has more lettuce than the Sultan of Brunei. However, this rash conclusion flies in the face of social science research. We turn now to page 56 of Robert Samuelson’s 1995 book The Good Life and Its Discontents. Samuelson, here and throughout the book, argues that money doesn’t buy happiness. “It’s family, friends and work that contribute most to well-being,” he quotes political scientist Robert Lane saying. To support this view, Samuelson reprints some fascinating data from the University of Chicago’s National Opinion Research Center. The numbers are a few years old, but the 1990s haven’t been wildly inflationary. Here they are:

IncomeVery HappyPretty HappyNot Too Happy
$75,000 or more45%49%6%

While it’s true that, overall, these data show that money doesn’t dramatically affect the distribution of happiness, let’s examine some of the nuances. One is that you’re nearly four times as likely to be miserable if you make less than $15,000 than you would be if you made more than $35,000. True, 79 percent of people making less than $15,000 still consider themselves “pretty happy” or “very happy.” But what if you don’t happen to belong to this naturally buoyant majority? Clearly, for at least 15 or 16 percent (i.e., the proportion of unhappy people exceeding the “naturally unhappy” baseline of 5 or 6 percent), the lack of money buys unhappiness.

Chatterbox is also intrigued by what happens when your income rises above $75,000. If you were unhappy before, apparently you’re likely to stay unhappy. But 11 percent of the people who were “pretty happy” will become “very happy.” Money may not buy happiness, but if you’re already happy there’s a decent chance it will make you more happy!

Does the likelihood of such a “happiness boost” increase when you graduate from prosperous to out-of-sight rich? The data doesn’t say, but Chatterbox bets it does. By creating the broad category, “$75,000 or more,” the University of Chicago figures lump Bill Gates with lowlifes like Chatterbox and Linda Tripp. Also, there really ought to be a category for “ecstatically happy,” which Chatterbox suspects rises precipitously when you get above $1 billion. Chatterbox would appreciate hearing from any readers who have research to back up or refute these hypotheses.

–Timothy Noah