The Why Files The Why Files --

 Economic downturn: Can money buy happiness?

Money: It can't buy me love. What about happiness?

So the $787-billion economic-stimulus plan has been signed into law. The compromise bill fully satisfied nobody, but we can hope it will at least ease that down-the-drain feeling we get from reading the headlines.

Two million jobs have vanished from U.S. economy in just three months, and nobody seems to think this is the bottom.

Unemployment figures have risen from 5 percent in Apr. 2008 to over 7.5 percent in Jan. 2009
Photo: BLS
The economic downturn guarantees misery for some. But what will be the overall impact on happiness and well-being?

It's hard to overestimate the pain and dislocation, the homelessness, hunger, poverty and unemployment that have resulted from today's economic meltdown.

Happy news

Happy people do more reading and socializing, while unhappy people watch more TV. John Robinson of the University of Maryland says that since work hours reduce TV time, screen time could rise during the downturn.

Even those who still have jobs must worry about the future.

In the face of misery, why are we talking about happiness?

Decades back, some social scientists began shifting their focus away from pathologies like pedophilia and crime toward the flip side of life. Members of the discipline called "positive psychology" have studied happiness, satisfaction, quality of life, self-realization or resilience. Their goal was to learn what makes people feel better, and to see how positive emotions interact with events in the outside world.

Even the experts sometimes simplify the jargon and discuss "happiness," so forgive us if we follow suit.

Man stands with torch as forest floor starts to burn in background
Working to benefit others is one way to improve emotional well-being, studies find. Here, a volunteer works on a neighborhood woods restoration project to eradicate exotic species.

What do we really need?

We asked Edward Diener, a professor of psychology of the University of Illinois and a veteran happiness researcher, how he sees happiness during the current downturn, and he talked about "considering your wealth and resources more broadly than just money, which helps put some things in perspective. Gee, my wife and I lost 35 percent of our retirement money, and that has some real consequences. But our kids are doing well, our friendships are strong, and our health is good."

Psychologist Abraham Maslow first wrote about a "hierarchy of human needs," that started with food and shelter, but Diener says recent theories of psychological well-being "emphasize things like social relationships, meaning and goals, feelings of mastery, and growth/learning. We find in our world research that money is the best predictor across the globe … in part because people everywhere want money. But when we turn to positive feelings, and absence of negative feelings, then the psychological needs are more powerful."

A pair of dice is placed next to red house and green hotel pieces from Monopoly on white paper
In the housing market, a lot of people lost a lot of money based in ignorance, greed and devious business practices: A toxic brew, indeed!

Diener adds that while we traditionally view happiness as the result of fulfilling needs and desires, the benefits could flow both directions. "People high in well-being are more likely to have close friends, be successful at work, and make more money, to have pro-peace and cooperative attitudes, and have good health."

Could new information on happiness help us weather the winter of our financial discontent?


Terry Devitt, editor; Nathan Hebert, project assistant; S.V. Medaris, designer/illustrator; David Tenenbaum, feature writer; Amy Toburen, content development executive

©2023, University of Wisconsin, Board of Regents.