Why money won’t buy you happiness

Here’s my column for BBC Future from last week. It was originally titled ‘Why money can’t buy you happiness‘, but I’ve just realised that it would be more appropriately titled if I used a “won’t” rather than a “can’t”. There’s a saying that people who think money can’t buy happiness don’t know where to shop. This column says, more or less, that knowing where to shop isn’t the problem, its shopping itself.

Hope a lottery win will make you happy forever? Think again, evidence suggests a big payout won’t make that much of a difference. Tom Stafford explains why.


Think a lottery win would make you happy forever? Many of us do, including a US shopkeeper who just scooped $338 million in the Powerball lottery – the fourth largest prize in the game’s history. Before the last Powerball jackpot in the United States, tickets were being snapped up at a rate of around 130,000 a minute. But before you place all your hopes and dreams on another ticket, here’s something you should know. All the evidence suggests a big payout won’t make that much of a difference in the end.

Winning the lottery isn’t a ticket to true happiness, however enticing it might be to imagine never working again and being able to afford anything you want. One study famously found that people who had big wins on the lottery ended up no happier than those who had bought tickets but didn’t win. It seems that as long as you can afford to avoid the basic miseries of life, having loads of spare cash doesn’t make you very much happier than having very little.

One way of accounting for this is to assume that lottery winners get used to their new level of wealth, and simply adjust back to a baseline level of happiness –something called the “hedonic treadmill”. Another explanation is that our happiness depends on how we feel relative to our peers. If you win the lottery you may feel richer than your neighbours, and think that moving to a mansion in a new neighbourhood would make you happy, but then you look out of the window and realise that all your new friends live in bigger mansions.

Both of these phenomena undoubtedly play a role, but the deeper mystery is why we’re so bad at knowing what will give us true satisfaction in the first place. You might think we should be able to predict this, even if it isn’t straightforward. Lottery winners could take account of hedonic treadmill and social comparison effects when they spend their money. So, why don’t they, in short, spend their winnings in ways that buy happiness?

Picking up points

Part of the problem is that happiness isn’t a quality like height, weight or income that can be easily measured and given a number (whatever psychologists try and pretend). Happiness is a complex, nebulous state that is fed by transient simple pleasures, as well as the more sustained rewards of activities that only make sense from a perspective of years or decades. So, perhaps it isn’t surprising that we sometimes have trouble acting in a way that will bring us the most happiness. Imperfect memories and imaginations mean that our moment-to-moment choices don’t always reflect our long-term interests.

It even seems like the very act of trying to measuring it can distract us from what might make us most happy. An important study by Christopher Hsee of the Chicago School of Business and colleagues showed how this could happen.

Hsee’s study was based around a simple choice: participants were offered the option of working at a 6-minute task for a gallon of vanilla ice cream reward, or a 7-minute task for a gallon of pistachio ice cream. Under normal conditions, less than 30% of people chose the 7-minute task, mainly because they liked pistachio ice cream more than vanilla. For happiness scholars, this isn’t hard to interpret –those who preferred pistachio ice cream had enough motivation to choose the longer task. But the experiment had a vital extra comparison. Another group of participants were offered the same choice, but with an intervening points system: the choice was between working for 6 minutes to earn 60 points, or 7 minutes to earn 100 points. With 50-99 points, participants were told they could receive a gallon of vanilla ice cream. For 100 points they could receive a gallon of pistachio ice cream. Although the actions and the effects are the same, introducing the points system dramatically affected the choices people made. Now, the majority chose the longer task and earn the 100 points, which they could spend on the pistachio reward – even though the same proportion (about 70%) still said they preferred vanilla.

Based on this, and other experiments [5], Hsee concluded that participants are maximising their points at the expense of maximising their happiness. The points are just a medium – something that allows us to get the thing that will create enjoyment. But because the points are so easy to measure and compare – 100 is obviously much more than 60 – this overshadows our knowledge of what kind of ice cream we enjoy most.

So next time you are buying a lottery ticket because of the amount it is paying out, or choosing wine by looking at the price, or comparing jobs by looking at the salaries, you might do well to remember to think hard about how much the bet, wine, or job will really promote your happiness, rather than simply relying on the numbers to do the comparison. Money doesn’t buy you happiness, and part of the reason for that might be that money itself distracts us from what we really enjoy.


18 thoughts on “Why money won’t buy you happiness”

  1. The vanilla-vs-pistachio experiment wouldn’t have worked on me. Regardless of the points or other rewards, I would never have chosen pistachio ice cream, because I don’t like it. I suppose it’s possible I might have chosen the pistachio option simply because of the higher point value, but since I don’t like pistachio ice cream, I still wouldn’t really have “earned” any sort of “reward”.

    In a way, it’s sort of like when a girlfriend pays her boyfriend’s traffic fines/jail bond/etc. The fines are supposed to teach the boyfriend that his behavior is wrong, and requires punishment. If the girlfriend pays the fine with her own money, the boyfriend learns nothing, and continues to participate in the bad behavior.

    1. I don’t like ice-cream at all (plus I wouldn’t eat non-vegan versions, even if I did). I wonder if they’re controlling for the population which doesn’t have a sweet tooth? Perhaps we’re a significant sub-group, especially when it comes to testing pleasures in a world where anything with sugar in it is held to be the highest good.

  2. It’s a shame so many people are convinced money can buy happiness. What they don’t realise is they can feel like a King just from doing the things they truly love.

    I bet most people wouldn’t believe me when I say I wouldn’t want to win the lottery. I couldn’t spend money I know I didn’t earn. I wouldn’t enjoy what I bought.

    You can have the feeling of winning the lottery simply from living everyday pro-actively. Doing what you love, moving towards what you’re passionate about and progressing as a person.


    1. How can I do what I truly love while I’m forced to work for other people in order to survive? In this system, money can buy me time to find out and do what makes me happy. The trick is not to spend it on luxury goods, just fulfill the basic needs and keep the rest for safety. I think it would make me much happier if I were financially independent (of alienated labor). Also I wouldn’t have to feel guilty for “earning” money with work that I don’t believe in.

      But there is one big problem with becoming rich over night: you have to suddenly pick your friends very carefully. If you associate with poorer people, you will mistrust their motives. If you associate with rich people, you will have to spend money to keep up with them, to show them you’re not trying to exploit them. You can buy some people’s affection but that’s certainly not the road to happiness. So maybe money is a curse for extroverts who depend on being popular?

  3. as long as you can afford to avoid the basic miseries of life

    The post makes important points, I just wish the sentence above was not so often glossed over. From what I understand, people who were previously below the poverty line do in fact become happier. But I also thought that this might depend on what they do with their money. Are people “happier” if they put their money into savings as opposed to spending it?

    I also hear about the rare rich person who gives away their money. I’d be curious what effect this has on them. I can tell you we’d all be happier if politicians were required to live in poverty for one year, as a nice wake-up call.

  4. Wouldn’t 100 points from the 7 minute task buy 2 gallons of vanilla ice cream (50 points each)?

  5. Good point! I didn’t notice that, and it isn’t mentioned in the original study as an option. Maybe there was a rule, implicit or explicit, that you could only get one tub of ice cream

  6. I think it depends on what is causing the person unhappiness. If they living in the bee-stinging nest of poverty, yes a bit of money can alter their mindset to a happier world view. However having lots of money cant(wont) cure a broken heart. Why is it so widely believed that money can bring happiness, could it be that a great cause of unhappiness is caused by financial insecurity. Given a choice between being poor and unhappy or being rich and unhappy, most would choose the later cause money may not buy happiness but it does extend ones choices, and the more choice we have the more chance we have to find what makes us happy.

  7. “Hsee concluded that participants are maximising their points at the expense of maximising their happiness. The points are just a medium – something that allows us to get the thing that will create enjoyment.” But points are not just a medium – receiving full points is a pleasure in itself, and we are used to experience this pleasure, at least for a moment
    in time.

  8. Tom wrote: “Although the actions and the effects are the same, introducing the points system dramatically affected the choices people made.

    Now, the majority chose the longer task and earn the 100 points, which they could spend on the pistachio reward – even though the same proportion (about 70%) still said they preferred vanilla.”

    I couldn’t access the paper – how did the experimenters determine that the same proportion of people said that they preferred vanilla, in the posts exercise?


  9. I’ve heard it said that many lottery winners end up going bankrupt – they’re not able to even manage the money that was presumed to bring them joy. Fascinating study you cite here, showing that the achievement of something quantifiable (points) is the motivator, not necessarily the prize at the end (ice cream). “Money distracts us from what we really enjoy” – this is worth pondering.

  10. An interesting article. I agree that money cannot buy happiness but I also see that everyone is capable of gaining happiness from money, as well as everyone is capable of gaining sadness and misery from money.

    Money is no different from anything else in life, it is how you choose to interpret it that decides if you will gain happiness from it

  11. “… as long as you can afford to avoid the basic miseries of life…”

    I agree with those who point out the importance of that concept. The glib bumper sticker declarations of “money can’t/won’t buy happiness” can be dreadful salt in the wounds of people for whom lack of money is a source of constant stress and deprivation. The misery of poverty isn’t just an attitude problem. It’s a nightmare of trying to live in a Maslow’s pyramid with a crumbling, insecure base.

  12. hi

    I can recommend this documentary. It takes a look at the lives of real lottery winners. Pretty much none of them seemed any happier. Family moochers, greedy friends and neighbors, creeps, freaks and crooks, all are after the money. Even with your real friends, a situation arises when hanging out, where they have to get up at 700am to go to work and you don’t, and after a while, this has nasty side effects on the friendship. Richard

    Lucky [enregistrement vidéo] : if money can’t buy happiness, can winning the lottery come close? / produced by Sean Welch … [et al.] ; directed & produced by Jeffrey Blitz.

  13. I dream of winning a big lottery amount for what I could do with it. My family would not need a lot to secure their futures but I would have so much fun creating opportunities for others through education and mentoring.

  14. Money doesn’t buy happiness because true, permanent, everlasting happiness is unachievable. We are evolved to constantly be striving, to want, to have goals. But once we get those goals, we aren’t designed to just give up, call it quits, and be “happy.” We are designed to move on to another goal.

    Evolution has made happiness unobtainable, on purpose. We are literally designed to mostly be UNHAPPY, chasing the things that we think and feel should make us happy but never ultimately do. Thank you evolutionary psych.

  15. But money at least won’t bring you unhappiness. Having more money will not make you less happy. Also, I think that you need to have good ideas about what to do with your money. It’s the lack of good ideas that perhaps lead to money not buying happiness. I know for example that I’d fly to buenos aires for my friends birthday (something I can’t do with no money) and that’d make me very happy. Then I’d go see my brother in Melbourne. Etc.

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