The money-happiness equation

During the Chuseok season, my attention was drawn to the merchandise tagged “Happy Buy” in stores.
Not surprisingly, many are keen to grab happiness, but does this kind of advertising really induce true satisfaction?
As reported in the JoongAng Daily in September of this year, during Korean Thanksgiving the Consumer Price Index accelerated, fueled by rises in oil prices and the cost of agricultural products. Standard & Poor’s forecast a 3 percent increase in consumer prices in 2008. Many predict a drop in consumer spending due to enormous household debt.
Is all this good for happiness? The misery index shows that inflation adversely affects happiness (Tella, MacCulloch and Oswald, 2001).
The article “Why Are Koreans So Unhappy?” (JoongAng Daily, Sept. 7, 2006), explained that Korea ranks low on the global scale of happiness.
Behavioral economics (beyond the models with purely economic objectives) deals with the complex patterns of noneconomic objectives, such as fame and status. Economists including Daniel Kahneman, Robert Frank and Richard Layard say that a status-neurotic fever runs deep in the psyche, causing moral stagnation, because of humans’ incessant penchant for competition.
According to a study (Yew-Kwang Ng, 2002), most East-Asian countries with Confucian cultures, despite being rich, rank low on the happiness index. The underlying reasons are: environmental disruption, excessive competitiveness, repressive education, excessive conformity, negative attitudes toward enjoyment, and emphasis on outward appearance.
According to the study, Confucianism emphasizes achievement. The resultant rat-race syndrome reduces the contentedness of people in East Asia, compared to, for example, the Indians, whose level of happiness is higher despite a lower per-capita GDP.
According to recent statistics, in Korea the number of individuals with net financial assets of at least $1 million has grown by 14.1 percent (Asia-Pacific Wealth report, reported in the JoongAng Daily).
However, as per the Easterlin Paradox, there are diminishing returns to happiness after the threshold level of per-capita income in the range of $10,000 to $20,000 per year (Darrin McMahon, May 7, 2007). South Korea has reached a plateau, with an average happiness ranking of 5.8 on a scale of 1 to 10 (World Database of Happiness).
The clue to achieving persistent or sustained happiness lies in development in the broadest sense of the term ― encompassing conflict resolution, tolerance of diversity, commitment to heterodoxy, mutual trust, openness, removal of gender bias, democratic values, fairness, absence of corruption and a tolerance of minorities.
The rat race, pollution, urban congestion, unhindered growth in production and consumption, higher population density, corruption (bribes, slush funds, the BBK scandal, academic forgery, embezzlement of funds) ― all these are detrimental to happiness.
Money cannot buy true happiness. However, real happiness, based on enlightened self-interest, could buy money.

*The writer is an economics professor at Hanyang University.

by Gouranga Gopal Das