Most people believe that they would be happier if they had more money (that’s why the lottery is so popular). However, while average income (adjusted for inflation) has increased almost 300% in the last 50 years, the number of people describing themselves as “very happy” is essentially unchanged. You conclude:

Question

A. The increase in income is not enough to lead to increased happiness.
B. The increase in income is too slow to lead to increased happiness.
C. Most people are incorrect in thinking that more money would make them happy.

Answer 1

C. Most people are incorrect in thinking that more money would make them happy.

Evidence suggests that money is a lot like health: If you have no (or very little) money, you are likely to be very unhappy (just like if you are very sick and have poor health, you’re likely to be unhappy), but having lots of money doesn’t in any way ensure that you’ll be happy (think of all the unhappy people you know who are in fine health!).

This is an important topic because it emphasizes most people’s lack of insight about their own emotions. A quick search of “unhappy lottery winners” online will provide several real-life examples of people who became suddenly rich and ended up unhappy. However, other research (Kaplan, 1987: “Lottery winners: The myth and reality”, Journal of Gambling Studies, Vol. 3) finds that many lottery winners are well-adjusted and happy. Thus, the message is NOT that getting more money makes you unhappy, but rather that (after rising above very low levels of income) there is little relationship between increases in one’s wealth and increases in one’s happiness.