Will Money Increase Subjective Well-Being?
Four replicable findings have emerged regardingthe relation between income and subjectivewell-being (SWB): 1. There are largecorrelations between the wealth of nations andthe mean reports of SWB in them, 2. There aremostly small correlations between income andSWB within nations, although these correlationsappear to be larger in poor nations, and therisk of unhappiness is much higher for poorpeople, 3. Economic growth in the last decadesin most economically developed societies hasbeen accompanied by little rise in SWB, andincreases in individual income lead to variableoutcomes, and 4. People who prize materialgoals more than other values tend to besubstantially less happy, unless they are rich.Thus, more money may enhance SWB when it meansavoiding poverty and living in a developednation, but income appears to increase SWBlittle over the long-term when more of it isgained by well-off individuals whose materialdesires rise with their incomes. Several majortheories are compatible with most existingfindings: A. The idea that income enhances SWBonly insofar as it helps people meet theirbasic needs, and B. The idea that the relationbetween income and SWB depends on the amount ofmaterial desires that people's income allowsthem to fulfill. We argue that the firstexplanation is a special case of the secondone. A third explanation is relativelyunresearched, the idea that societal norms forproduction and consumption are essential tounderstanding the SWB-income interface. Inaddition, it appears high SWB might increasepeople's chances for high income. We review theopen issues relating income to SWB, anddescribe the research methods needed to provideimproved data that will better illuminate thepsychological processes relating money to SWB.