Study says money only makes you happy if it makes you richer than your neighbors

March 22, 2010, University of Warwick

A study by researchers at the University of Warwick and Cardiff University has found that money only makes people happier if it improves their social rank. The researchers found that simply being highly paid wasn't enough - to be happy, people must perceive themselves as being more highly paid than their friends and work colleagues.

The researchers were seeking to explain why people in rich nations have not become any happier on average over the last 40 years even though has led to substantial increases in average incomes.

Lead researcher on the paper Chris Boyce from the University of Warwick's Department of Psychology said:

"Our study found that the ranked position of an individual's income best predicted general life satisfaction, while the actual amount of income and the average income of others appear to have no significant effect. Earning a million pounds a year appears to be not enough to make you happy if you know your friends all earn 2 million a year"

The study entitled "Money and Happiness: Rank of Income, Not Income, Affects Life Satisfaction" will be published in the journal . The researchers looked at data on earnings and life satisfaction from seven years of the British Household Panel Survey (BHPS), which is a representative longitudinal sample of British households.

First they examined how was related to how much each person earned. They found however that satisfaction was much more strongly related to the ranked position of the person's income (compared to people of the same gender, age, level of education, or from the same geographical area).

The results explain why making everybody in society richer will not necessarily increase overall happiness - because it is only having a higher than other people that matters.

Related Stories

Recommended for you

Intensive behavior therapy no better than conventional support in treating teenagers with antisocial behavior

January 19, 2018
Research led by UCL has found that intensive and costly multisystemic therapy is no better than conventional therapy in treating teenagers with moderate to severe antisocial behaviour.

Babies' babbling betters brains, language

January 18, 2018
Babies are adept at getting what they need - including an education. New research shows that babies organize mothers' verbal responses, which promotes more effective language instruction, and infant babbling is the key.

College branding makes beer more salient to underage students

January 18, 2018
In recent years, major beer companies have tried to capitalize on the salience of students' university affiliations, unveiling marketing campaigns and products—such as "fan cans," store displays, and billboard ads—that ...

Inherited IQ can increase in early childhood

January 18, 2018
When it comes to intelligence, environment and education matter – more than we think.

Modulating molecules: Study shows oxytocin helps the brain to modulate social signals

January 17, 2018
Between sights, sounds, smells and other senses, the brain is flooded with stimuli on a moment-to-moment basis. How can it sort through the flood of information to decide what is important and what can be relegated to the ...

Baby brains help infants figure it out before they try it out

January 17, 2018
Babies often amaze their parents when they seemingly learn new skills overnight—how to walk, for example. But their brains were probably prepping for those tasks long before their first steps occurred, according to researchers.


Adjust slider to filter visible comments by rank

Display comments: newest first

1.7 / 5 (3) Mar 22, 2010
Another excuse to support socialism?
"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.
Winston Churchill "

This study was done in UK with little social mobility. Would that same results obtain in a more classless society?
4.3 / 5 (3) Mar 22, 2010
Pretty soon advances in manufacturing will make most goods practically free, intellectual property is going that way. What will be left to buy?
1 / 5 (1) Mar 22, 2010
The results explain why making everybody in society richer will not necessarily increase overall happiness - because it is only having a higher income than other people that matters.
Making only a subset of the society richer will necessarily decrease overall happiness.

Sharing of sorrow in a group of people (on all levels, from family up to society and mankind) is a stabilizing factor for the group.

This study has one important boundary condition: the common level of education. Without this condition the results will be breathtaking for some and a banality for others: education weighs more than money.
Uneducated people need more money to feel happy - educated people can be happy while having less money than their neighbours.
2.5 / 5 (2) Mar 22, 2010
ahh haha it's human nature to attempt to be the alpha dog :)

If Person A has more money than person B..Person A is going to have brag rights haha. Ah, but it's a vicious cycle...then person B will rob person A.

So in relative increase in poor also increase in crime :P Go Robin Hood!

1 / 5 (1) Mar 22, 2010
It just proves that the Alpha-Male nature of simians-originated Homo Erectus applies today as it was 100,000 thousands years ago. Nothing new here. Move on, morons!!!
5 / 5 (1) Mar 22, 2010
"Money doesn't buy happiness"... That's just what we tell poor people :D
5 / 5 (1) Mar 22, 2010
Exactly jselin! I've said for years that money doesn't buy happiness, but neither does poverty. I'm willing to bet that if you were to take a hard working individual who's income is below the poverty line and give him enough money to pay his bills and live worry free, he'll be one heck of a lot happier.
3 / 5 (2) Mar 22, 2010
.Another excuse to support socialism?..
Many laissez-faire capitalists and carpet-monetarists are often neglecting the fact, high intensity free market can exist only at artificial environment, highly controlled by government, maintaining legal environment for free market, because people are basically cheaters. In this way the day of free tax converges to the middle of year - despite the wishful thinking of many utopists from both sides of ideological barricades. It's evident, most of people understand not only physics, but fundamental social theory too. As a whole, people are ideology and belief driven, not by rational thinking.
not rated yet Mar 23, 2010
It's evident, most of people understand not only physics, but fundamental social theory too
I do agree. :)
Many people even understand English.

Remark for the casual reader: No, this is not "pointless verbiage". It is a comment to draw attention to the fact that some ideology driven commentors obviously are superficial. They don't exhibit any quality control when writing, neither for their language nor for their thinking. But they produce comments at the highest rate.
3.7 / 5 (3) Mar 23, 2010
Poverty (and my fantastic education) has bought me profound happiness. I used to earn $500 a day engineering robots now I earn $8 a day sitting on a tropical island off of Cambodia selling internet access. My identical twin brother kept with the professional route and freaks when his income drops below $1500 a day and he spends his nights worried about his future.

He HAS to make $1500 and that is very hard no matter where you are. Words can not describe how easy it is to live on $8 a day, I don't have a care in the world.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.