Many people say that money can buy anything including happiness. If one possesses a huge sum of money then they will be able to acquire the necessities of life that brings great satisfaction and significantly increases the happiness in people. Happiness comes from within and is an intangible asset. Happiness is a common term with a vast concept. One of the most conventional definitions refers to happiness as an attitude towards one’s own life, the degree to which a person judges the overall quality of his or her life as a whole in a favourable way (Bruni & Stanca, 2007 ).
Others believe that true happiness is not obtained through material possession but divine paths. They deem that the aim of human way of life is not restricted to money as it is regarded as only a kind of survival in this world and doesn’t have any relationship with happiness. Money versus happiness What is crucial in a human being’s existence? Money will, in all likelihood, be the answer in most people’s life. The current society endorses the objective of making as much money as one can without considering what the cost is.
People lie, cheat, and steal to gain another dollar at the loss of others happiness, but do they acquire the happiness from others? Vice versa, there are people who take home more money in a day than others in a year but yet they are still contemplating suicides. According to Bruni and Stanca (2007), when a person income rises, they need to pursue a higher level of pleasure so as to achieve the same level of happiness. A very vital question often asked is “Does money buy happiness? ” Money does buy happiness if it is a material need.
According to Diener, Harter and Arora (2010), “the Gallup World Poll included measures of not having enough money for food and shelter and therefore allowed people to examine the path from income through basic needs to the various forms of subjective well-being” (p. 269. ). However, using money on a want more than a need, for example, a nicer car or fancier bag, is unlikely to buy happiness which is long lasting. Money is directly related to happiness only to a certain extent but after a certain amount, it does not necessarily determine a rise in happiness.
These three various effects help to explain these paradoxes are different perspectives, comparison of incomes and the doubling effect of incomes. Different Perspectives of the Rich and Poor The impact of rising income depends on the different social status an individual holds. The two social statuses that will be discussed here are the rich and the poor. The poor is defined as having insufficient means to afford needs and many a time requires struggle to attain those means; while the rich is defined as having more than enough means to afford needs and luxury wants. These are the two extremes in a society.
Those experiencing poverty view having an increase in income as being a luxury, allowing them to afford even more necessities to support themselves and their family which builds a perspective in them that having more money means having an increased level of happiness. However, the increase in income only brings happiness till it allows the individual to escape poverty and after which, the rise in income no longer contributes much to an individual’s happiness level (Martin, 2008; Myers and Diener, 1997). On the other hand, many rich individuals do not feel any happier with rising incomes.
According to Martin (2008), the doubling of average incomes in the west for the past 50 years did not invoke any significant rise in the level of happiness. It is true that with higher incomes, an individual’s spending power will increase but that will also mean an increase in aspirations (Easterlin, 2001). With this consistent rise in income and aspirations, each factor is dependent on one another, the level of happiness will remain the same and in some cases when the aspirations are beyond what the income can fulfill, depression may follow.
Many tend to spend their extra rise of income haphazardly which eventually creates a vicious cycle of getting and spending rather than using that sum to increase freedom and peace of mind (Martin, 2007). In addition, having more income means having a wider spectrum of options to choose from in life. However, with more options it will mean choices become more difficult (Binswanger, 2006). With more options, it means choosing any one will incur a larger opportunity cost when all options seem attractive but only one can be chosen, hence forgoing the remaining options.
Therefore, the status of rich or poor determines the significance of increasing happiness. Comparison of Incomes Humans have a natural tendency to compare what they have with everyone around them, including the comparison of incomes (Binswanger, 2006) where people choose to earn more than others, hence resulting in happiness. This can be well explained by the saying “keeping up with the Joneses” where people tend to keep upgrading themselves and become better than others hence making them feel they are of a higher status.
When this happens, people begin to desire for branded cars, larger houses, expensive clothes and luxury holiday trips. This raises the self-esteem together with their social status (Martin, 2007) where people begin to feel good about themselves and being seen as admirable in a society’s viewpoint. As stated in a research by Martin (2007), some people were asked if they prefer earning an income of $50,000 as opposed to others having $25,000, or an income of $100,000 while others get $200,000, they chose the former.
This clearly shows that even if every individual has one’s income increased, the level of happiness will not increase because of the need to have high self-esteem with high social status. The rise of income of everyone in the society does not equate to the rise of relative income where relative income means having earned a certain amount of income as compared to others’. Having a higher status than others may bring happiness but for the status of an individual to rise, others will have to be in a lower status and to some extent this can only be achieved at the expense of others’ happiness.
Furthermore, if an individual decides to pursue a higher relative income, one will have to do that on the expense of one’s personal leisure time, striving to advance in one’s career to earn more money. Assuming that this thirst for status remains unquenched, the individual will be giving up a lot of one’s leisure time just to reach that temporary moment of high status and eventually a ‘snowball’ effect is created where more time, which can be spent on being happy, is being eroded at the end of the day. The Doubling Effect of Incomes
Due to the high tendency of people adapting to higher income with higher aspirations (Binswanger, 2006), the desire for more income will never stop. In addition, when an individual earns a certain level of income, one will easily get used to it and soon becomes dissatisfied again. To satisfy that individual again, it will mean having to increase one’s income with a significant percentage. A study was done to further explain how an individual can only be satisfied when one’s income is doubled instead of raising by a percentage smaller than 100%.
People tend to be happier when their initial income of $10,000 is increased to $20,000 as opposed to those who earns an initial $80,000 and getting an increase to $90,000. For that to feel an equal impact, the initial income of $80,000 should rise to $160,000 instead (Diener, Ng, Harter and Arora, 2010). In terms of percentage, the increase is required to be at least 100% increase for the impact to be significant enough to make an individual happier. In other words, the doubling of an income will give rise to a higher satisfaction level as compared to a relatively smaller increase.
Table 1 Percent Distribution of Population by Happiness at Various Levels of Income, United States, 1994 Table 1 depicts the various income groups and shows how the doubling of each income group rises the mean happiness rating. As shown, the mean happiness rating for those earning $10,000 is 2. 1 while those earning $20,000 has their rating rising by 0. 2 and as the earnings doubled each time, the rating increases steadily. Counter-argument: Money Bring More Opportunity to Happiness Money has a direct correlation to happiness to a certain extent.
According to Tatzel (2003), happiness rises when we experience self-esteem, control and optimism, and it decreases when those factors fall. Rise of income increases these personalities, allowing one to attain a higher level of happiness. Self-esteem is the beliefs, thoughts and feelings people have about themselves. It motivates one’s attitude and behavior. People use their money to boost their ego while some use money on retail or food to mask pain or deal with emotional issues. These help them to feel better and contribute to their happiness.
Research conduct by Becker (1965), stated quite a few examples of how money indirectly bring happiness through time-saving inventions. For example, shopping in supermarkets help to save shopping time, vehicles help to cut down time spend on traveling to our destination and communication deceive such as telephones help us to get our message across faster. The key focus here is monetary affluence resulted in more opportunity leading to happiness Being financially stable, one has control the nature of their daily activities.
This brought about spiritual joy as one can go to the movies every weekend, or lavish on gifts for the people he/she love. For the rich, money helps them have pure happiness because they can help bring relief to the suffering millions and the victims of the disasters. Money can also give us experiences and opportunities that we would otherwise never be able to have Money not only provides a shelter over one’s head but also provides assurance, leading to optimism. For example, when faced with illness, stress and fear of death will be relieved due to the security that money promises.
A man in fear of death ceases to be afraid when he has the needed money, even before he actually cures the illness. Thus, money took away the fear and helps one to be optimistic. There are so many more things that money could be used in exchange for our desires thus, it resulted in a raise in happiness index. Money is one of things that contribute in the process of being happy. Rebuttal: Money cannot buy happiness Money enables the opportunity for happiness, but people more often than not squander away on things that will make them happy but never does so.
It only buys illusions of happiness. As such, people have a tendency to shift towards money and material pleasure. According to Binswanger (2006), all time-saving innovations mentioned by Becker (1965) did not result in time-savings. For instance, e-mails are more convenient than sending letters thus prompting individuals to send more messages through mail as compared to letter than they ever would. Instead of having to read only one letter, there will be an increase in the exchange of information resulting in failure of time-saving improvements.
Very often, people mentioned that money can increase one’s sense of well-being as it does not restrain one from spending more time in leisurely pursuits. For example, watching a musical show or going for a vacation. However in reality, time was wasted on work and traveling, less time was engaged in experienced happiness. Psychologists of Harvard University concluded that wealth increases human happiness when it brings people out of poverty but it does little to increase happiness thereafter. There are people who are wealthy but lonely, while others are poor but happy because they have their close friends, good health and family.
Happiness is not just set by one single factor but many others; it does not always increase in direct proportion to the amount of money. Conclusion In conclusion, money is necessary but not the obligatory prerequisite for happiness. Individuals may be more satisfied with their life if they have more money, but this does not necessarily mean they will be happier. Money does provide basic needs which leads to happiness as it satisfies one’s desire, however this feeling does not prolong when there are more money. In addition, there must be a balance between earning morning and leading a healthy lifestyle.
Being absorbed in earning money can easily cause one to forget their actual meaningful tasks such as caring for their families, having time with their friends…etc. They trap themselves in the materialized ambition and lose what are important to their life. Happiness and contentment are simply poles apart. Being in the upper social status distribution will not ensure a placing in the upper rank of the happiness distribution. However being contented and getting involved in meaningful accomplishments such as help to pave a way to the top of happiness index.
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Topic: Rising Income Does Not Necessarily Determine a Rise in Happiness
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