Money can buy happiness up to a point

Home > Opinion > Columns

print dictionary print

Money can buy happiness up to a point

Are Koreans happy? Are they happier today than they were a generation ago? Is their much vaunted economic success, the envy of many around the world, making them happier as the years go by?
Far be it for an American with only a limited understanding of Korean history and culture, writing from thousands of miles away, to answer those questions. Clearly, Koreans must answer them for themselves. And yet in doing so, they may find it helpful to consider some of the insights of the new field of “happiness studies.” Combining the work of psychologists, sociologists and economists, happiness researchers seek to understand the determinants of human well-being. Their findings with respect to money are particularly interesting. Survey data in the United States, for example, conducted since the 1950s, suggest that despite massive increases in gross domestic product (GDP) during that time, the percentage of those describing themselves as “happy” or “very happy” has not changed. Economists refer to this phenomenon as the “Easterlin Paradox,” after the University of Southern California economics professor Richard Easterlin, who first identified the phenomenon in the 1970s.
Others have identified similar trends in Europe and Japan, where skyrocketing incomes have yielded only marginally happy returns.
To be sure, the data are not without their critics. The University of Rotterdam sociologist Ruut Veenhoven, for example, the director of the World Database of Happiness, disputes these findings. According to his latest research, carried out with the American professor of management Michael Hagerty, the average happiness has increased slightly in rich nations since the 1950s. And given that life expectancy has also grown during this period, Veenhoven and Hagerty conclude that “the average number of happy life years has increased at an unprecedented rate since the 1950s.”
Settling this dispute will likely involve the collection of much more data and the crunching of many more numbers. That probably won’t happen anytime soon. But what most happiness researchers do agree on now is that although more money greatly affects the general happiness of societies at low levels of economic development, that effect diminishes the richer they become. Thus, added income for a poor nation in Africa will likely increase happiness significantly. But once a nation reaches a level of per-capita income somewhere between $10,000 to $20,000 per annum, increased happiness as a function of increased wealth diminishes sharply. Plotting that relationship on a graph, with self-reported happiness in the y axis and GDP on the x, the line will rise steeply at first, then bend and then flatten.
According to the International Monetary Fund, GDP per capita in South Korea was $16,308 in 2005. The CIA World Factbook estimates that GDP per capita will approach $24,000 in 2006, when all the data are in. That is a phenomenal increase over the last several decades, and there is every reason to expect robust growth to continue for years to come. That is good news for South Korea, and yet, as far as happiness is concerned, the country is close to reaching, if it has not done so already, the income threshold where self-reported happiness flattens out.
Where does that leave Koreans? According to Professor Veenhoven’s World Database of Happiness, which draws on surveys conducted between 1995 and 2005 and asks individuals to describe their satisfaction with life as a whole, South Korea currently stands in the middle range of nations, with an average happiness ranking of 5.8 on a scale of 1-10.
That is ahead of Hungary (5. 6) and Russia (4.4), but behind China (6.3) and Japan (6.2), as well as Canada (7.6), the United States (7.4) and the nations of Western Europe, where Denmark (8.2), Switzerland (8.1) and Austria (8.0) top the world’s charts. In a different study, published in 2004 by the director of the World Values Survey, Professor Ronald Inglehart of the University of Michigan ranks South Korea 49th out of 82 countries, just behind China, Peru and Greece, and just above Iran, Poland and Turkey.
But if Koreans have reached the point where economic growth brings only marginally happy returns, and their average level of happiness is not as high as they might hope, that does not mean that they should stop striving to make money or resign themselves to stagnating happiness in the years ahead. In the first place, regardless of its effect on self-reported happiness, increased wealth brings all kinds of benefits, from the prospect of better health care to greater possibilities for education and travel to more luxuries for you and your family. As the Harvard economist Benjamin Friedman argued in his recent book, “The Moral Consequences of Economic Growth,” development “fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy.”
Economic stagnation, by contrast, leads to pessimism, retrenchment, intolerance and distrust. That sounds like un-happiness to me.
Growth, in other words, brings benefits of its own. But it can also provide the means to pursue other goals that happiness researchers identify as closely related to social well-being. The variables, of course, are many and complicated. But greater personal, economic and political freedom, the absence of corruption in business and government, enhanced civil rights and tolerance of minorities, gender equality, a high rate of citizen participation in voluntary associations and a healthy sense of social responsibility all correlate positively with higher levels of self-reported happiness.
Those are worthy goals that Koreans, like all peoples, can continue to pursue in the years ahead in the service of their collective well-being. But there are also steps that individuals can take to improve their own levels of satisfaction and fulfillment. In my next column, I’ll look at what the new happiness research has to say about how men and women might go about maximizing personal happiness in Korea, or wherever they might be.

*The writer is the Ben Weider Professor of History at Florida State University and the author of “Happiness: A History,” which will soon be translated into Korean.

by Darrin M. McMahon
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)