Income = Happiness? A Strangely Tough Sell in Aspen

I spent last week at the Aspen Ideas Festival, talking about Betsey’s and my research on the Economics of Happiness. You might think that my message—that income and happiness are tightly linked—would be an easy sell in Aspen, which is the most beautiful and most expensive city I’ve ever visited. But in fact, it’s the millionaires, billionaires and public intellectuals who are often most resistant to data upsetting their beliefs. You see, the (false) belief that economic development won’t increase happiness is comfortingly counter-intuitive to the intelligentsia. And it’s oddly reassuring to the rich, who can fly their private jets into a ski resort feeling (falsely) relieved of any concern that the dollars involved could be better spent elsewhere.

Over at The Atlantic, Clive Crook provides a useful summary of the talk (and a few pointers for how I could have done better). But we agree on the conclusion:

I came away thinking the Easterlin Paradox was a smoking wreck, and that pursuit of economic growth remains a worthy objective even for rich countries.

If you are interested in seeing the full talk—without paying thousands to visit the conference, here it is:Also, don’t miss an entertaining take from The Atlantic’s Jennie Rothenberg Gritz who—in a career-first for me—cites my hair as evidence of expertise:

Wolfers, a Wharton professor with an Australian accent and surfer-style blond hair, certainly seems like someone who should be an expert on happiness

On a related note, you might enjoy a video of the interview that Charles Kenny and I did with the irrepressible Felix Salmon.

If there’s one lesson I learned from this, it’s that economists need to stop dressing so similarly.

Finally: See also Matthew McClearn’s useful piece on the age-old happiness v. GDP debate.


"All I ask for is a chance to prove that money can't buy happiness." Ashleigh Brilliant


But money can't buy me love.


"If you are interested in seeing the full talk—without paying thousands to visit the conference..."

Not to mention the millions you'd have to pay for a time machine...

Enter your name

Is it really money, as money itself, that matters, or is it the social status that goes along with it? Would I be as happy having an income at the 90th percentile if everyone believed that I was dirt poor?

Is it really income, or wealth? If I have zero debt, millions of dollars in the bank, a no need to work -- but a merely average income from my investments -- am I less happy than if I had a mortgage, a car payment, and a large salary?

Andreas Moser

I found complete happiness here the other day, with almost no money: - I bet this is even more beautiful than Aspen.

Caleb b

I can't remember who said it but...
"money doesn't buy happiness, but neither does poverty."
Amen brotha.


Maybe the reason this concept is such a tough sell in Aspen is that the millionaires there have spent (probably literally) millions to escape most of the unhappiness-causing side effects of economic development.

Impossibly Stupid

Having been on both ends of the continuum I can say this: Being rich will never make you as happy as being poor will make you sad.


Money can buy you economic security and free time, both of which should in theory make you happier, but it cannot buy you happiness itself.

At least for me, most of the things which make me happiest (spending time with family and friends, reading books checked out from the library, playing chess & Scrabble, enjoying the great outdoors) do not require a huge amount of money. But they do require free time, which is something money can buy you (i.e. make enough of it and you don't have to work as much).

Likewise, knowing that I have enough money saved up to live comfortably for the rest of my life (i.e. economic security) eliminates several causes of stress and worry that could make me unhappy, but does not make me happy in and of itself.

I think one of the reasons rich people are not necessarily happier than poor people is that they do not stop working long enough to take advantage of the free time that their wealth has bought them, instead choosing to spend much of their time on activities that do not necessarily make them happier (i.e. working to accumulate even more wealth).



Oh.Yeah.I agree.

Mr. Etymology

There is a problem with squishy definitions.

If you asked me if I was happy (which is the question Patch Adams used to greet people with), I would reframe the question and answer that, "yes, I'm content." "Happy" for me has always has a connotation of being somehow in an elevated state of be pleased (with some thing or things in general), sometimes too happy, maybe even to the point of silliness---"slap-happy".

However, in looking the word up in the dictionary just now, I see that the first definition given is synonymous with "fortunate" or "lucky", which strikes me as very odd, until I realize that the word comes from the same root as happenstance, or haply, meaning by chance. That coincides with my experience of happiness as something transient. It is not a continual state for me, but there are moments, or periods of time, when I am happy. They occur when I am pleased by some unexpected but enjoyable event, from as little as receiving a smile from a loved one to experiencing some new pleasurable activity. When I reflect, happiness is always associated with enjoying other people.

Does it have anything to do with money? If money means to you a comfortable, relatively stress-free worry-free life, then, yes, I guess that, if not a preliminary requirement, money does help a lot to set the ground for happy experiences. But I've been happy with my friends, in days when I had no money to spend, and we just palled around.

If by happiness you mean "feeling fortunate", then, it is almost a tautology isn't it? That is, if you equate being fortunate with having a fortune . . . Then, should it be surprising that those with bigger fortunes should feel fortunate, and by definition "happy"?



All else being equal, a larger fortune would seem to increase happiness. But in this world, all else is seldom equal. And so, a question: suppose you have a choice between a large fortune with the condition that you can never live anywhere but Manhattan, and a modest income with the choice to live in a place like Aspen?

Nick Coghlan

It's the old complex cause problem. "Happiness" is a complicated concept that encompasses a lot of things. Wealth factors into many of them, especially those that relate to self-determination - the ability to do what we want when we want to do it, rather than being in "survival mode" just trying to ensure we have adequate shelter and enough to eat and drink.

Once you're in a liberal democracy where you aren't in constant fear of having things taken from you by force, then yes, up to a point, "free time" and "disposable income" are going to be major factors in how happy you are (with how well they translate being limited by how well you understand what is actually going to make you happy long term).

But wealth on its own is pretty meaningless if you're living in constant fear of that guy over there with the machine gun and the machete or are wondering whether you might just disappear one night because you've been picked up by the secret police.



Liberal democracy? So instead of the guys with the machine guns & machetes, we get IRS agents who shear the sheep every year, instead of ripping off the skin all in one go. It may be better, but I guarantee you it's not for the benefit of the sheep.


I seem to remember reading a study some years ago showing that faith (so to speak) in science and its positive role in society was strongest in the least developed countries and weakest in the most developed countries. So people enjoying the benefits of science and technology thought little of it. People living in grim poverty thought it sounded great.

Probably something similar with wealth. Perhaps relatively wealthy people take their wealth for granted.


A question worth considering -

As the world becomes increasingly globalised, have/will people compare relative wealth more widely? Either on an individual level - eg my friends in Canada all have hot tubs, my firends in Scotland don't - or more generally - eg. I'm proud of being American because we are the richest nation on earth.

I think there's quite a good chance of each, in richer countries at least my generation has a lot more foreign friends than my parents' and the spread of Americian culture can only have reinforced the link between money and your value as a human and national pride.


Mo Money has been shown to correlate perfectly (r = 1) with Mo Problems.