Economists tend to look at the raw data and draw conclusions based on their findings while applying what they deem is common sense. For many the answer is simple, the more money you make the happier this will make you, right?
Psychologists, however, have also studied the relationship between wealth and happiness have also drawn their own conclusions. One such Harvard psychologist, Daniel Gilbert, is author of a book titled: Stumbling on Happiness. In his book he concludes that, “wealth increases human happiness when it lifts people out of abject poverty and into the middle class but that it does little to increase happiness thereafter.”
Additional work has been done at Harvard by Michael Norton, Assistant Professor of Business Administration in the Marketing Unit at the Harvard Business School (HBS), and Elizabeth Dunn and Lara Aknin at the University of British Columbia (UBC). Three separate studies were done. The first involved a national survey of 632 American men and women. A second study tracked how 16 employees spent a profit-sharing bonus at a Boston-based company. Finally, the third study involved giving money to University of British Columbia students on campus. Those students were given the option to spend the money to cover a personal bill or expense, use the money to buy a gift for someone, or donate the money to charity. The conclusion of all studies showed that people were actually happier when the money they had was spent on others versus themselves.
All this confirms what many of us have heard from the Bible “It is better to give than receive.” Acts 20:35.
DISCLAIMER: This information is not intended to provide legal or accounting advice, or to address specific situations. Please consult with your legal or tax advisor to supplement and verify what you learn here.