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Does money buy happiness?

Posting in Finance

It's one of those enduringly perplexing questions that doesn't seem to have a satisfactory answer: Will getting that raise make me any happier?

In the interim, the answer would seem to be "yes." Any significant boost to one's finances should trigger immediate feelings of elation. But won't that feeling eventually diminish? Isn't there usually a regression to the mean, a state of bearable dissatisfaction?

British cognitive scientist Tom Stafford has a clever take on how lasting bliss works. Hint: He says it isn't about fattening your bank account. People have tried it, it doesn't work, he says. He cites a famous study done in 1978 that found that those who hit lottery jackpots eventually ended up about as happy as those who didn't. One explanation, he points out, stems from a theory called the hedonic treadmill, wherein people simply get used to the new-found status and benefits conferred by being suddenly rich. Another reason may be that psychologically we tend to measure how good we feel about ourselves by comparing ourselves to others. So no matter how much material wealth we amass, others will have more.

The intuitive solution to this paradox then is simple. Identify the attainable aspects of life that make you happy, affix a monetary value to it and go! But according to Stafford, this too is fool's gold. He points to a Chicago School of Business experiment that had participants choose to either finish a 6 minute task for a gallon of vanilla ice cream or a slightly longer assignment for pistachio ice cream. Though only 30 percent initially chose to complete the 7 minute task (because they really liked pistachio that much more), the researchers found that by adding a higher point value to both the longer task and to the cost of Pistachio ice cream, most people opted for more toil in exchange for pistachio, die-hard vanilla lovers included. Basically the sheer act of measuring happiness by assigning greater financial value tricks us into thinking attaining it will make us happier, even if it doesn't.

I'm not even going to pretend I know the answer to this because, as all you smart readers know, happiness is a complicated matter. It involves neurochemicals, lifestyle choices, changes that happen as we age, perhaps even Freudian factors. But perhaps the best we can do, all we can really do, is to think about all the things you can appreciate about life right now, as it is. As far as I know, it's the only sure-fire way to choose to be happy.

Have a joyous weekend everyone!

More food for thought:

— By on March 28, 2013, 9:02 PM PST

Tuan Nguyen

Contributing Editor

Contributing Editor Tuan C. Nguyen is a freelance science journalist based in New York City. He has written for the U.S. News and World Report, Fox News, MSNBC, ABC News, AOL, Yahoo! News and LiveScience. Formerly, he was reporter and producer for the technology section of ABCNews.com. He holds degrees from the University of California Los Angeles and the City University of New York's Graduate School of Journalism. Follow him on Twitter. Disclosure