DISCOVERING HAPPINESS
ANTHONY KNUTH
My research question was “Does an increase in the income of an individual also increase his or her level of
happiness?”
HYPOTHESIS
An increase in income will make a person markedly happier
RESEARCH DESIGN
The Correlational Research Design will be used to examine the connection between level of happiness
and income.
The criterion of correlation is fulfilled since the association between relative income and happiness will
be measured using data from the World Database of Happiness.
Under the traditional correlational design, there is no difference required in time when independent and
dependent variables are collected. This study begins in 1970 and ends in 2000. Over these three decades GDP
and level of happiness are measured, both can be collected independently of each other (since GDP is generally
calculated by governmental institutions) so this satisfies the time order criterion.
Through the examination of the effects of control variables, it is possible to meet the criterion of
nonspuriousness. Since only variables that one is aware of can be controlled it makes it difficult to include all
relevant variables. However since my topic is searching only to see if money generates happiness any other
variables can be seen as a product of this and thus it is unnecessary to control for them.
.
FULL LITERATURE REVIEW
My topic is to uncover what exactly it is in a person’s life that creates happiness for that individual.
One school of thought on the subject (Christakis, Fowler) argues that happiness is affected by the degree of
pleasure held by close friends, family and even friends of friends, up to three degrees of separation. Fowler
asserts that “if your friend’s friend’s friend becomes happy, that has a bigger impact on you being happy than
putting an extra $5,000 in your pocket.” 1 So basically this school of thought adds to Durkhiem’s ideas of social
networks and there affect on the individual.
Another school of thought (Stevenson, Wolfers, Hagerty, Veenhoven) suggests that economic well being is the
source of true happiness in individuals. “Our key finding is that rich people tend to be happier than poor people,
and in roughly equal measure, rich countries tend to be happier than poor countries.”2 Veenhoven asserts that
the reason wealth has such a large affect on happiness is due to the fact that “happiness is apparently not a zerosum game and can be raised by improving living conditions”.3 So basically those who are able to meet their
basic needs and then some are generally happier than those who cannot afford basic essentials, let alone extras.
1
Belluck, Pam. "Strangers May Cheer You Up, Study Says ." NYtimes.com. New York
Times, 4 Dec. 2008. Web. 7 Sept. 2009. <http://www.nytimes.com/2008/12/05/health/05happyweb.html?pagewanted=1&_r=1>.
2 Akst, Daniel. "It turns out money really does buy happiness. Uh-oh." The Boston
Globe 23 Nov. 2008: C4. Web. 26 Sept. 2009.
<http://bpp.wharton.upenn.edu/betseys/press%20reaction/Easterlin%20Paradox/
Boston%20Globe%2011-23-08.pdf>.
3 Hagerty, Michael R, and Ruut Veenhoven. "Wealth and Happiness Revisited."
Social Indicators Research 64 (2003): 1-27. Web. 26 Sept. 2009.
<http://www2.eur.nl/fsw/research/veenhoven/Pub2000s/2003e-full.pdf>.
A third school of thought exists (Gilbert, Deiner, Brooks) that claims true happiness lies in an individual’s
traditional personal relationships, be it with close friends or family members. One example is that a 2003 study
that followed 24,000 people for more than ten years documented a major increase in happiness after people
married. Brooks asserts this point when he says “The key to happiness is a life that reflects traditional values
and practices like faith, hard work, marriage, charitable giving and freedom”. 4 Thus happiness is created and
nourished by those relationships closest to us rather than by material goods, or social networks.
RESEARCH QUESTION
A review of the literature available illustrates that if nothing else there is a plethora of things that make people
happy, yet it seems none of the researchers can reach a consensus on what causes the greatest amount of
happiness.
The research question this paper will hope to answer is as follows:
Does an increase in the income of an individual also increase his or her level of happiness?
As for clarity the variables being studied are income and level of happiness, both of which can be easily
identified by reader in the research question. Happiness is the only ambiguous term, but since it is a matter of
personal belief whether you are happy or not, and the majority of the research is impersonal questionnaires,
creating an operational definition is largely unnecessary.
Since the question is stated empirically and the variables of income and level of happiness are clearly indicated
all the criterion for testability have been fulfilled.
Concerning originality, there has been research that sought to answer the same question, however the results of
these different studies are conflicting and have produced many different explanations, hence the need for a
study that looks at every side of the die individually.
Answering this research question would by theoretically relevant since there has been no consensus among
scholars on the data available.
The answer to this research question will be practically relevant since we could finally define what it is that
makes up happy and thus become happier by pursuing whatever it may be that causes happiness.
DATA
Research results illustrate that there is at least some correlation between increases in wealth and happiness for
all countries. However, several countries with lower GDP per capita have a strong positive correlation between
increases in wealth and happiness (Italy, South Korea, Mexico, & the Philippines).
4
Baumgardner, Julie. "What Makes People Happy?" First Things First. N.p., n.d.
Web. 7 Sept. 2009. <http://firstthings.org/page/media/the-family-column/
what-makes-people-happy>.
Figure 1: Relationship between happiness and GDP 5
5
http://www2.eur.nl/fsw/research/veenhoven/Pub2000s/2003e-full.pdf, p. 10
Figure 2: Increase in happiness per extra $10006
This trend of lower GDP per capita countries seeing a greater increase in happiness when wealth is improved is
exemplified by the relationship between the two variables. Where high and middle GDP per capita countries
only experience less than a .1 increase in slope per $1000, low GDP per capita countries see a remarkably larger
1.7 increase in slope per $1000.
6
http://www2.eur.nl/fsw/research/veenhoven/Pub2000s/2003e-full.pdf, p.10
This phenomenon is not only present in low GDP per capita countries but is also seen in an analysis of the
United States as Figure 3 (below) shows. The graph illustrates that although a little more than 40% of the U.S
population considers themselves very happy, when you break the population down in terms of level of income it
indicates that the wealthier a person is the more likely they are to consider themselves “Very Happy”. In
addition, the lower the level of income means they are more likely to respond with “Fairly Happy” or “Not Very
Happy”.
Figure 3: Percentage Distribution of Population by Happiness, by Size of Income in the United States, 1970. 7
Figure 4 (below) illustrates that at least 4 of these 5 countries saw an increase in happiness along with growth in
GNP. Although that is not enough data to conclude that happiness is caused by increases in wealth, we can infer
some key points. First off, Brazil and W. Germany both see the greatest increase in happiness with an increase
in GNP, this goes along with what was found in Figures 1 & 2. Secondly, although the U.S and Japan both
experienced growth in GNP they both had relatively small increases in happiness. This again reinforces what
was found in Figures 1 & 2, since the U.S and Japan are both considered High GDP per capita countries they
experienced a smaller increase in happiness then their Lower GDP per capita counterparts when the level of
wealth increased.
7
http://graphics8.nytimes.com/images/2008/04/16/business/Easterlin1974.pdf, p.100
Figure 4: Changes in Happiness and Economic Growth between 1960and 19758
Conclusions
The hypothesis has only been confirmed for countries that are considered to have a Low GDP per capita
income. Increases in happiness for middle and high GDP per capita countries were not statistically significant
enough to prove that happiness was caused by increases in monetary wealth. (See Figure 1)
Overall, the data suggests that once people are able to afford basic everyday amenities such as food, clothing
and shelter, money seldom is what makes them happy. Logic would agree with this point, as it is difficult to
consider yourself “Very Happy” when you are struggling to feed your family or pay a mortgage. Basically, this
study has illustrated that an increase in wealth only makes you happier if you are living in a poverty stricken
area and truly need the extra money. (See Figures 2 & 3)
This study has raised some interesting questions. Since happiness is not caused by increases in monetary wealth
for middle and high GDP per capita areas then what causes happiness for people living in these areas? In Figure
1, people in the U.S. and Luxemburg have a relatively stronger positive correlation between increases in wealth
and happiness than Japan or Denmark, and Norway actually has a negative correlation. This could be caused by
the value that people set on wealth in each country or other situational factors. Either way a more in depth study
would be beneficial to discovering what makes people in high/middle GDP per capita regions happy.
8
Veenhoven, Ruut. Conditions of Happiness. Holland: D. Reidel Publishing Company,
1984. Print. P. 153