Money and Happiness by Angus Deaton

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Angus Deaton…Who?

 

He just won Noble Price for Economics.

Daniel Kahneman…Mostly you know. Father of Behaviour Economics.

Both of them published a much debated articles about Money and Happiness in the year 2011. They claimed, beyond US $ 75000/- yearly income, additional income has no consequences on Happiness. Its academic article, if you are interested, you may read it here.

Okay, now whats your thoughts.

 

Does more money brings more Happiness?

Do you agree, money has any association with happiness?

 

Whatever your answer, I am not judging it either way. But, I am sure, after reading next few lines, whatever is your answer, it will make you rethink.

 

As Mr. Kahneman says, ““Happiness” can mean different things to different people at different times.”

 

So, answer depends upon your state of mind today or generally in last few days. More over, both of them have further divided happiness into two parts. (1) Emotional Well being – Happiness in day to day life or how you feel today or oflate. (2) Life evaluation – what you make of your life based on where you are today, compared to when you started off. It means general satisfaction about your own life. Research says that upto a point with additional income, happiness increases, this is logical because, without reaching a stage of financial freedom in life, individual are concerns with making two ends meet or to deal with future. But, after a point, additional income doesn’t make a great difference. In India Context, I think beyond Rs. 15-20 lacs a year income ,more money does not generate more happiness.

But then why, we should work hard and accumulate wealth. So research is wrong. NO. We are always taught, money and happiness has no connection. After a time, we think of sabbatical or meaning and purpose in life etc….But, we have to make money and earn, you simply can’t give up your job and become entrepreneur or being an entrepreneur change the nature or work. because:

 

The research also states that more money make Life Evaluation more worthy ( In …………..Eyes_). Apart from anxiety and concern about Emotional well being in day to day life.

 

One feels that he/she has achieved proverbial definition of Success, because material success obviously coupled with social status, assets to show off, does gives an external validation and over a period of time, we ourselves, start building a notion of success ( I should use the word Life Evaluation) based on the wealth that we have. A cycle of 99.

I am putting the exact words used by both the Nobel Laureates:

 

“We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation (Success) and low emotional well-being.”

 

Looking from Work – Life Balance perspective, more work brings High Life Evaluation.

We are unable to trade off between high emotional well being ( stop working hard once you have achieved a stable income) with low life evaluation (low social status, anxiety of future without social security in india context, or high peer pressure or expectation of family). Hence, just like work – life balance, you can’t achieve the equilibrium.

Thus, work hard, earn more, it may not bring Happiness but in long unit will increase your Own Worth, in your Own eyes.

To sum up, if you are content and confident about your self and who you are and what have you become and reasonably certain about future, more money does not increase Life Evaluation. If you haven’t reached that stage. Work Hard, Earn More.

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