Acclaro Blog

Can Money buy Happiness?

A recent study by Thomas DeLeire and Ariel Kalil suggests that it some areas, it does, though not necessarily in the way you think it would. In a paper entitled “Does consumption buy happiness? Evidence from the United States”. The authors examined the association between various components of consumption expenditure and happiness in the Health and Retirement Study (HRS), a nationally representative sample of older Americans. They found that only one component of consumption is positively related to happiness—leisure consumption. In contrast, consumption of durables, charity, personal care, food, health care, vehicles, and housing are not significantly associated with happiness. Second, they also found that leisure consumption is associated with higher levels of happiness partially through its effect on social connectedness, as indexed by measures of loneliness and embeddedness in social networks. On one hand, these results counter the conventional wisdom that “material goods can’t buy happiness.” One the other hand, they underscore the importance of social goods and social connectedness in the production of happiness. Click here to go where you can download and read the entire study. The article is really a fascinating read and reminds me that it is time for another trip!

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