(A lot of) money makes you happy

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It is difficult to prove empirically whether money and happiness are related. However, new data show that millionaires are particularly satisfied with their lives.


Yachts in front of tax haven: Port Hercule in Monaco © Kit Suman / unsplash.com

Does money make you happy? Countless scientific studies have tried to answer this question. The answer is difficult because causality can hardly be proven. Nevertheless, there is evidence that happier people are also more successful at work and therefore more wealthy. A new DIW Berlin study focuses on millionaires, i.e. the wealthy, and compares them with other groups in German society. The results are clear.

The connection between money and happiness is difficult to describe because happiness is influenced by many factors. Happiness research shows that people who are healthier, have a family, are satisfied with their work and live in an intact environment are generally significantly happier. On average, men are happier than women in most societies. People in a free, democratic society are usually significantly happier than people in an autocratic or socialist society, even if one takes into account differences in economic performance. It is more complex with old age: younger and older people are happier on average with their lives than middle-aged people. So if we want to understand the connection between money and happiness, we have to consider these other factors as well.

It is also important and at the same time difficult to distinguish between correlation and causality. Does more money really lead to more happiness? Many readers may affirm this personally, but here too the connection is much more complex. Because people who are happier may also be more successful professionally and thus earn more money.

Another important distinction must be made between happiness and satisfaction. Most happiness surveys attempt to measure the emotional dimension of their own feelings, which often focuses on their own experience in the present. Satisfaction, on the other hand, should be an evaluative, cognitive dimension. So it is a rather rational, reflective assessment of the course of your own life. It is interesting to note that in international comparison people in Germany state a relatively low level of happiness, i.e. on the emotional level, but on the other hand express a comparatively high level of satisfaction with their lives. Some are tempted to press Germany into a cliché of rationality and efficiency, even if this often falls short.

The difference in happiness and contentment within society and between different groups and regions is also important. Here, too, Germany is exceptional in many ways. Even 30 years after reunification, there is still a relatively large difference in satisfaction between people in East Germany and West Germany, even if you take into account many other factors that influence this satisfaction, such as income, health, unemployment, working hours, insecurity and age.

The new DIW Berlin study looks at the differences in life satisfaction between different groups according to their wealth. This shows an astonishingly strong difference in general life satisfaction between millionaires and other groups. People in the lower half of the wealth distribution are somewhat less satisfied than people in the upper middle class, who in turn are somewhat less satisfied than the wealthy. However, the greatest increase in life satisfaction applies to millionaires, as the graphic shows.

The study looks at specific areas of satisfaction. She comes to the conclusion that millionaires are not only much more satisfied with their income than other groups, but also with their work, their family and their health. You have to know that almost three out of four of these high net worth are self-employed (73 percent), that they are predominantly male (69 percent), live in western Germany (94 percent), have no migration background (86 percent), mostly well educated and medium-sized or older age.

There is one consolation for all of us who do not have large fortunes: millionaires have less fun in their lives, it seems: they are no more satisfied with their free time than most and even less satisfied than people who are wealthy. Perhaps this is also because they work a lot more than others: on average 47 hours a week compared to the 37 hours of other citizens. In short, it seems to be true: Money seems to make people happier with their lives, especially when people have a lot more money.

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