The Economics of Happiness: Can Money Truly Buy Contentment?

This essay examines the intricate relationship between money and happiness, exploring whether wealth can truly buy contentment. It reviews literature defining happiness and analyzes the advantages and disadvantages of having money, considering factors like basic needs, material possessions, emotional well-being, and the ability to enhance the quality of life. The essay discusses how money can provide security, comfort, and opportunities, but also acknowledges that it cannot buy emotions, health, or meaningful relationships. It delves into economic concepts like utility and the changing preferences associated with increased income, concluding that while money can contribute to happiness by fulfilling material needs and providing choices, it is not the sole determinant of overall well-being, as factors like health, love, and personal connections play crucial roles. Desklib provides access to similar solved assignments and past papers for students.

Running head: CAN MONEY BUY HAPPINESS?
Can money buy happiness?
Name of the student
Name of the University
Author note

CAN MONEY BUY HAPPINESS?
Table of contents
Introduction................................................................................................................................3
Literature review........................................................................................................................5
Advantages and disadvantages of having money.......................................................................6
Conclusion................................................................................................................................10
REFERENCE LIST.................................................................................................................11

CAN MONEY BUY HAPPINESS?
Introduction
Evidences have showed that money can buy happiness but up to a certain limit. For
purchasing the basic necessities in our daily life money is just the basic need. With the help
of money, the quality of life can be improved. Number of social surveys and researches have
proved money can buy happiness if that happiness consists of buying materialistic things.
Money might provide the temporary comforts of life although it cannot buy happiness for the
long term. An individual may have plenty of money although there is no sweetness in it if he
has no one to share with. According to a research it has been found that sometimes emotional
wellbeing of the human beings rises steadily with the income whereas families with low
income usually experiences more emotional distress (Hout 2016). However, once people can
afford the fixed expenses, after that it does not really affect the happiness. Various types of
security and comfort only can be bought with money, people cannot buy happiness with
money. Many wealthy people have been seen leading a miserable life because they may be
lonely or have no family and friends to share with. In this case money has no powder to buy
happiness. Therefore, money might fill the belly however cannot fill the void in the heart.
Some people with heavy pockets might think money as a burden and it adds complications in
life. There is a price tag to everything in the modern world and therefore in this way wealth is
the root of the ultimate happiness (Iyer and Muncy 2016). When an individual is dying from
some incurable disease, a great deal of money will never give him the satisfaction as he is not
being able to use it for enjoyment. However, in some ways the idea that money ca buy
happiness cannot be denied. There are number of ways which will suggest that money can
buy happiness. With the help of money, the quality of life can be increased in which it buys
happiness. Happiness is a kind of psychological condition that comes as a result of achieving
of values where values can be both spiritual and material. Material values consists of food,
clothes, car house and many more, on the other hand spiritual values usually pertains to

CAN MONEY BUY HAPPINESS?
person’s consciousness like knowledge, mental health or beauty. Foer many people buying
materialistic things makes them feel happy instantly (Gilovich, Kumar and Jampol 2015).
The power of money to increase the options for a person contributes to happiness. When a
person wants to have peace of mind after a retirement or might value being with their
children while they are young, at that time presence of huge amount of money will make the
possibilities easier. Money can buy both time and commodities. Money can increase
happiness by helping people to achieve the components of happiness. Money can also be
used to experience the greatest joy in living. In the term of Economics satisfaction or
happiness can be measured with the term utility. Here, utility measures the satisfaction an
individual derives from the consumption of particular goods and services. Money cannot buy
happiness as when there is an increase in income of a person his level of satisfaction and the
behaviour towards the preferences will change. Happiness can be out weighted when there is
a loss of any family member or any incurable disease which cannot be removed. According to
some people there is no happiness without love whereas love can also be measured with
money by buying expensive things to the near and dear ones (Lemrová.et al. 2014) It is quite
difficult to define happiness as different people have different definition of happiness from
their own experience.
According to some people money can buy happiness in a way because money gives
power. Money can only be used to buy the basic necessities of the life, and having a lot of
money can help someone buy expensive and goods of fancy use ( Hout 2016). However,
money cannot buy the happiness or the emotions which can be achieved from love and
affection. Therefore, money cannot buy everything. Even though money is termed as the
most valuable thing in life, it cannot buy the family or life-long friends. Even a person’s
general knowledge cannot be brought by money. Memories made with the loved ones or a
deceased loved one cannot be brought back by money. Money cannot buy the joy and

CAN MONEY BUY HAPPINESS?
happiness which friends and family bring into the life (Lemrová et al.2014). In case when
human beings are poor money can provide the roof over their head and also helps to maintain
and support good health. When there is a presence of enough money an individual can focus
on the happiness by fulfilling the different needs of the near ones. It can bring ease to
people’s life with respect to obligations and bills which are financial in nature. Some life-
long friends, a good relationship, making wonderful memories with the dear ones or
accomplishing something all by own are some of the things which cannot be brought by
money (Gilovich, Kumar and Jampol 2015). People living in smaller houses smaller owning
smaller amount of wealth may be more fortunate than someone who is leading a wealthier
life. According to the research made by a famous American news website Huff Post it has
been found that people who possess more wealth tend to be highly respected in the society
than the people who possess less wealth. Though money according to the most of the people
can buy everything however, it cannot buy the knowledge and the life lessons. By spending a
lot of money someone might achieve higher education although it cannot help in fighting the
complicated obstacles in real life (Clark et al. 2018). Therefore, money cannot buy
everything in life like for example it cannot bring back the one who have away. Money can
be used to buy fancy things but the satisfaction achieved with that will be limited. Research
suggests that an increase in consumption or income cannot always increase happiness.
Literature review
Different researchers have defined happiness in different ways. Many explanations of
life satisfaction have been reviewed by different scholars. According to some researchers the
wellbeing of people will be U shaped all throughout the life. According to Wiese Thomas
Economics and Happiness are part of behavioural economics (Cheung and Lucas 2015). The
relation between happiness and the income is quite complex. Although most of the papers
concluded that richer people tend to be happier compared to the poorer ones.

CAN MONEY BUY HAPPINESS?
Zhang states that the relationship between money and happiness does not hold true
universally. Different individuals have different prospects of happiness index. People who do
not have concern for others will not gain happiness by spending on others. Many people think
that the richer they are the happier they will be. People are always motivated to maximize the
income although there is a presence of negative relationship between life satisfaction and
income. Rise in income for a particular country does not necessarily mean rise in the
well-being of the people in the nation. When the gross domestic product per capita is low
the life satisfaction of the people in that particular country tends to grow. However, when the
gross domestic product exceeds $10,000 there will be no increase in the satisfaction of life. It
has also been noticed that there is a weak correlation between and the momentary happiness
achieved which does not have any monetary value. Therefore, income has a negative effect
on the well-being of the people (Clark et al. 2018). Relative income of the people affects
more on the well-being of human being rather the rise in the level of income. Also, some
evidences have suggested that the satisfaction of life is being influenced by the rank of the
distribution of income. The hypothesis related to relative income dos not explains the reason
behind the temporary effect on the wellbeing of an individual when there is permanent
increase of the income.
Advantages and disadvantages of having money
Most of the data suggests that after money is used up for basic needs any increase in
income will not help to increase the well-being of an individual. These evidences suggest that
money cannot buy happiness. Though money can be used to buy all the expensive and fancy
things, it does not provide all the satisfaction (Engel 2015). Subjective wellbeing of the
human beings is associated on the different ways of how people spend their time. People who
have high income devote their maximum amount of time on compulsory work activities and
less amount of time on leisure activities. People with higher income tends usually seen

CAN MONEY BUY HAPPINESS?
spending more time in stress and higher tension. Although there is a negative relationship
between global life satisfaction and income, some people are still highly motivated to
increase their income. The psychology of the consumer suggests that when consumers spend
more on the services and products they attain a self -satisfaction. When money is spending on
certain services and goods which will match their personality there is increase in the level of
well- being and happiness. Households those who have appeared to saves less does not have
the capability for enjoying in the old age. People can also become happy from giving. There
is also a strong link between the giver and the achiever which enhances happiness.
Remaining healthy is one of the main gates to become happy. However, there is a thought
that richer people are happier in a way that they have lots of money in order to keep
themselves healthy. Although there can be some incurable disease which cannot be treated
and, in that case, money cannot help. It is also understandable that in the world of science and
technology it is impossible for human beings to live without money (Kahneman et al. 2006).
Also, being wealthy does not necessarily means being happy. Health is also not always
related to money. A good health can only be achieved by maintaining a healthy lifestyle.
Happiness itself is a volatile subject. Money might increase the subjective well-being when it
comes in eliminating poverty. The word subjective well-being is one of the most important
term used for happiness. When an individual earns more, it leads to rise in consumption
possibilities which indirectly also increases the level of utility. There are more opportunities
for rich people as they can afford more goods. They can therefore enjoy high status in
materialistic society. The people who are usually unhappy can also be fewer effective co-
workers. In today’s world as there is a presence of price tag in everything, the root to
everything in the world is therefore happiness (Clark et al. 2018).
Money might help in getting the temporary comforts of life however it does not
provide temporary happiness. When someone is bedridden or is suffering from any kind of

CAN MONEY BUY HAPPINESS?
disease which is not curable money in this case cannot bring happiness. There is nothing in
the world that cannot be bought by money (Dunn, Aknin and Norton 2014).. Therefore, it can
be said that money is required in order to lead a happy life. Money can make people happy
through buying materialistic things. With the help of money people can afford to buy an
expensive house or good food and, in this way, money is known to provide financial security.
However, it is not possible to live without money in this world of science and technology.
Staying healthy is therefore the key role in staying happy which can be achieved only by
leading a healthy lifestyle. Wealth therefore cannot buy happiness in any form. Even with
moderate level of income people can stay much happier when he is happy and grateful with
whatever he has. It can also be said that money can never promise to give a happy and a
caring family.
Being rich does not guarantee the path to happiness. Money can be important for
attaining happiness like it can provide us with better health care and safer homes. However,
after some point of time when our basic needs are met like when money satisfies the usual
needs for health care, safety, shelter are met the positive effects of money falls down.
Working for longer hours for a stressful job therefore does not provide happiness (Engel
2015). According to most people happiness can be achieved from experiences rather than
buying materialistic things. Buying physical objects like mobile phones, expensive cars,
expensive dress might provide happiness which will be temporary. Buying things make
human beings happy for a very short time (Dunn, Aknin and Norton 2014). Even though
buying these things might makes people happy, after sometime they will get habituated with
the new things and the items will fade in the background. On the other hand, the happiness
which comes experiences are likely to increase over time. Most of the people however things
that when they spend money on themselves, it will make them happier. However, this is not
always the case. Researchers suggests it has been seen that when people spend money on

CAN MONEY BUY HAPPINESS?
others rather than spending on themselves, they acquire more happiness (Hout 2016). When
people spend their bonus on others or donate it to charity they have been seen to achieve
more happiness. As spending on others often makes people feel good about themselves.
There are different ways in which people can feel happy. The researchers also show that
people who earns more feels focused on themselves compared to those people who earns less.
People who does not earn more usually takes pleasure in building relationships with other
people. When surveys were conducted among the high earners and the low earners, it was
found that people who are wealthier will experience more pride and contentment. Whereas
people who are poor or usually have low income are reported to show more love and
compassion. Both the groups also have been reported to be enthusiastic at the same level
(Kahneman et al. 2006). Poverty is also associated with negative health outcomes. It has also
been noticed that people who has low income like to form stronger bonds with others which
will eventually help them to cope with less favourable circumstances. Income also influences
the emotions of people. There have been many studies which shows that people tend to
become happiest when they try to spend money on certain things.
Money therefore, can bring happiness when they are spent in a right way and when
they are spent correctly. It can increase happiness level up to a certain point which will make
them feel financially secure (Dunn, Aknin and Norton 2014). Having a lot of money will help
to buy things whatever people like although it might does not bring down the level of anxiety.
When people are free to purchase things of their wish it will also make them feel happier.
Having enough money to buy things according to one’s wish will definitely increase the
levels of happiness. Money can also help people attain memorable experiences like travelling
the world or attending a live concert. Therefore, when money is spent on attaining such
experiences it gives people many moments of happiness along with many positive memories
to look back on. With the help of money people can also learn new things (Iyer and Muncy

CAN MONEY BUY HAPPINESS?
2016). Therefore, it is sometimes worthwhile to spend money in hobbies or sometimes in the
interests. Giving joy to others with the help of money can also provide huge amount of
happiness. Being able to see a smile on someone’s face will definitely provide a warm
feeling. Spending money on people of near and dear ones also provides plenty of happiness.
Sometimes helping a friend, family members or a sibling with money can also provide great
feeling. There are many tasks which people need to do throughout the day like laundry,
cooking, driving that may be tiring and people might not like to do their job. However, with
spending money these tasks can be easily eliminated by paying others in order to those jobs.
Conclusion
The line that money can buy happiness is true up to a certain point. It does give
happiness in a short span of time, however in the long it fails to do so. Money can give
people temporary happiness. Having enough money to buy the basic necessities of life might
provide happiness but that too up to a certain amount of time. Being rich does not necessarily
will bring happiness when the loved or the near or dear ones suffer from any kind of
incurable disease. Spending enough time with family members or with money are certain
things which money cannot buy. However, when someone is hungry or shivering in cold
outside, providing food and shelter with money will definitely bring him happiness. in order
to improve the quality of life money is the necessity although money cannot provide the
ultimate goal for happiness. with money one can travel the world outside and experience
different things. Money can bring happiness by giving enough freedom to enjoy different
experiences that life can offer.s Therefore, it can be concluded by saying that being rich does
not necessarily bring happiness in life.

CAN MONEY BUY HAPPINESS?
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