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Wealth and Happiness - Essay Example

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Wealth and Happiness.
Economists have long been studying the relation between money and happiness. A number of theories have been put across in literature to explain this relation. …
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Economists have long been studying the relation between money and happiness. A number of theories have been put across in literature to explain this relation. The most widely discussed theory is of relative income which states that an individual's value for money is relative to income of its peers. This theory suggests that people realize happiness by having more money relative to others in their reference groups. On the contrary, the theory of absolute utility advocates that increased income allows a more real purchasing power to fulfill needs which brings joy. However, some economists propose that the cheerfulness that money brings is temporary as with time individuals fast adapt to this increased income. For instance the new car, bigger house etc bought by increased income soon becomes old and no longer gives the feeling of happiness. A number of quantitative and qualitative studies have been done by economists to prove these theories and find a relation between happiness and money. There have been mixed results. While some have found proofs for these theories, others have found small effects of income on happiness and some have simply not found any correlation between happiness and material wealth. (Hagerty & Veenhoven, 2003)
Although there is an overwhelming literature to support the opinion that money buys temporary happiness, the connection between money and happiness is a complex one. Happiness is the feeling of satisfaction which arises when the value of something has been realized. For some this value can be achieved by individual efforts like completing an educational degree, spending leisure time with friends and family, promotion, sexual satisfaction and good health while for others it can be realized with money like increased public expenditure, investment in some social security, buying a new car and the like. Also more money probably would not make a difference to the prosperous ones. Studies also suggest that genes play an important role in determining happiness. (Herper, 2004) Essentially this means that happiness is not a zero-sum game. While money does bring in happiness by increased status, extra purchasing power and added protection in case of negative circumstances, any kind of other step up in life can also make a person glad. For most, however, this sudden initial feeling of pleasure wears off with time and does not translate in long term contentment. Long lasting pleasure can only be achieved by striving for continuous improvements which gives way to the notion of pursuit of wealth.
The notion of pursuit of wealth cannot be dispelled as good or bad. Everyone has to make money in order to survive and in order to sustain their families. However, in the haste of making more money, many sacrifice their mental peace and become isolated and depressed. The desire for more doesn't make good sense if it becomes addictive. There is no end to an individual's wants and the opportunities of new struggles to fulfill them. Unfortunately, there is a cost for pursuing wealth and that is having less time for family, friends, hobbies and community service. Moreover one doesn't get time to appreciate their achievements, enjoy their riches and feel happy. However there are certain positives of pursuit of wealth. A man's search of wealth has deflected his energies away from socially harmful elements like religious fights. The energies are dedicated to much more productive works like technological inventions and innovations which have added to the overall security, well being and ease in lives of people all over the world. (Lee, 2005) To sum up, while money may not make an individual happy or unhappy, better or worse, but it is said that being happy would help him make more money. (Herper, 2004)
Ackman, D. (2004). Putting A Price on Happiness. Forbes. Retrieved on May 31, 2008 from
Lee, D.R. (2005) Who Says Money Cannot Buy Happiness The Independent Review, 10(3), pp. 385-400
Hagerty, M.R., & Veenhoven, R. (2003) Wealth and Happiness revisited: Growing wealth of nations does go with greater happiness. Social Indicators Research. 64. Retrieved on May 31, 2008 from
Herper, M (2004) Money Won't Buy You Happiness. Forbes. Retrieved on May 31, 2008 from
Smith, T. (-) Money Can Buy Happiness, Reason Papers, University of Texas. 26(7) Retrieved on May 31, 2008 from Read More
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