The Relationship Between a Person’s Income and Happiness

There is a common notion that wealthier people are generally happier and more content than those who do not earn that much. No one denies that money can provide you with a better lifestyle and is a prerequisite to fulfilling one’s material desires. 

Being multidimensional and abstract, it would be detrimental to happiness to think that money is more important than other values. Social relationships are an essential part of happiness and it seems that this kind of materialism can detract from social relationships. Income is a perpetual goal and thus it might be harder to achieve than other goals unless one puts a cap on desires. Income also facilitates an environment with more social inequality and increases the gap between the rich and poor.  

While you might be able to buy that new iPhone or television that everyone has been talking about, it may not provide everyone the same happiness that spending some time with your parents or catching up with an old friend would. Independent, this happiness, uniquely obtained from social relationships or other non-material methods, cannot be substituted with the purchase of a commodity.    

Material ambitions are monotonic among people of different income groups i.e. more income should bring greater happiness. One would believe that an increase in income, cetris parabus, would have a favorable impact on happiness. However, this assumption does not hold in reality. As income grows, so too do ambitions and aspirations. This undermines the favorable effect of income growth on happiness. Being optimists, humans tend to believe that they would be happier in the future because they project current aspirations to be the same, while income level rises. But since aspirations and income go hand in hand; aspiration levels also grow along with income. Inevitably, experienced happiness is systematically different from projected happiness.  

Despite having money, there are a lot of things that contribute to a person’s happiness which one might not be able to buy with a better income. Things like respect, a cleaner environment, social equality, a loving family and so on cannot be bought by money. Yet, it is desired by everyone.  

Indeed, income is a significant contributor to a person’s happiness. Income and happiness do go hand in hand but the latter is not the sole determinant of the former. Thus, it is important to keep in mind other factors, often entirely independent of income, that play a key role in determining an individual’s happiness.  

Isha Aggarwal

Lotus Valley International School, Noida