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Money makes people happy

Jonathan Gardner and Andrew Oswald write,

One of the famous questions in social science is whether money makes people happy. We [Gardner and Oswald] offer new evidence by using longitudinal data on a random sample of Britons who receive medium-sized lottery wins of between £1000 and £120,000 (that is, up to approximately US$ 200,000). When compared to two control groups – one with no wins and the other with small wins – these individuals go on eventually to exhibit significantly better psychological health. Two years after a lottery win, the average measured improvement in mental wellbeing is 1.4 GHQ points.

Here’s the paper. (Yes, Tables 2 and 3 should be graphs).

One Comment

  1. Daniel Kahneman, Alan Krueger, David Schkade, Norbert Schwarz, and Arthur Stone disagree with this result. It's funny, yesterday, I came across this post and then across Kahneman et al's result in Tuesday Morning Quarterback on ESPN's Page 2.

    I wrote it up on my blog. I'm not sure who I believe, but I know that I'd like to have more money myself.