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There’s a little economic ditty called the Easterlin Paradox (after economist Richard Easterlin) which suggests that economic growth within a country does not necessarily lead to greater happiness (except for those in poverty, struggling to stay alive, who then come upon the means to pay for basic necessities). What Easterlin believed had a greater impact on happiness was how much you made in comparison to others. The Easterlin paradox has been widely accepted since the early 70’s when it was first put forth.

But now the Easterlin Paradox is being challenged by two economists at the Brookings Institute: Betsey Stevenson and Justin Wolfer. Their research suggests that money does bring happiness (though, of course, there are no guarantees; the proverbial runaway bus that could mow you down may be gaining momentum around any corner). When they looked at data collected by the Gallup organization, countries with the higher GDP per capita were dramatically more likely to register higher on the happiness scale. So, you have countries like Italy, Greece, Norway, Israel and the U.S., to name a few, several points, at least, (on a ten-point scale) ahead of Indonesia, Peru, India, and China, to name a few.

My sense of all of this is that the truth, as it often does, likes to play in the middle. Money can do a lot of things, including buying one happiness, beyond just material things. Disposable income allows us to do things for others, take trips to places we’ve never been, discover and support new hobbies, all of which can add joy to our lives. If we have lots of dough, we can even retire early. Perhaps way early. But traveling the world alone because you have no friends. Or not shopping much during the holidays because, say, your family relationships are strained to the point where gift exchanging doesn’t occur. Well, money can’t fix those things. And, to really underscore the point, no matter how much you may have in your wallet or purse, and in your bank accounts, its not enough to end the Iraq War.

Here’s a story from the Times of India that provides some additional insight.