Over the years, one of the most interesting statistical relationships is between income and subjective well-being. We all know the saying that “money can’t buy happiness”—though some people (particularly those who are financially strapped) do not believe it. But is wealth truly a key to happiness? To some extent, yes, but the evidence is more complex than you’d think. Ed Diener and Martin Seligman (2004) noted that multimillionaires from the Forbes list of the 400 rich- est Americans report high levels of life satisfaction (5.8 on a 7-point scale), but so do the Masai, a herding people in East Africa with no electricity or running water who live in huts made of dung (5.7 on the same scale).
As seen in the huge disparity in wealth between the happiest countries of northern Europe and the unhappiest countries of sub-Saharan Africa, cross- national studies reveal a strong positive association between a nation’s wealth and the subjective well-being of its people. There are some exceptions. But as
a general rule, the more money a country has, the happier its citizens are (Ng & Diener, 2014). Within any given country, however, the differences between wealthy and middle-income people are more modest. In one survey, for exam- ple, a group of the wealthiest Americans said they were happy 77% of the time, which was only moderately higher than the 62% figure reported by those of aver- age income. Comparisons within a single culture over time also show that there is no relationship between affluence and happiness. On average, Americans are two to three times richer now than 50 years ago—before we had computers, smart- phones equipped with digital cameras, shopping apps, and GPS systems that nav- igate our travel. Yet the number of respondents who said they were “very happy” was 35% in 1957 and only 32% in 1998 .
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