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If You’re Richer, You’re Happier

By Claire M. Guehenno, Contributing Writer

While money doesn’t necessarily buy happiness, people tend to be happier when they are richer than their peers, according to a recent study conducted by Harvard and Penn State.

A Harvard graduate student in sociology, Laura M. Tach, and Penn State sociology professor Glenn Firebaugh, presented their study in August to the American Sociological Association’s annual meeting in Philadelphia. They have since submitted it to a journal for review.

“There are many ways in which income can affect how happy you are,” Tach said. “How other people are doing influences how we perceive ourselves.”

Many past studies have shown that people in richer countries tend to be happier than those in poor countries, according to Firebaugh.

Firebaugh explained that “the difference isn’t as large as one might think it would be” because happiness becomes an issue of comparison.

Both researchers said they found the relationship between money and happiness an intriguing one, in part because it is related to daily life.

“If you look at people’s incomes over time, they have been rising in the United States, but people haven’t reported becoming happier,” Tach said, explaining that she and Firebaugh hoped to solve this puzzle.

To conduct the research, Tach and Firebaugh used a large national data set, “The General Social Survey,” which surveyed 23,000 people nationally between 1972 and 2002. They chose to focus on working adults, ages 20 to 64.

The two researchers examined questions of income and reported happiness while controlling factors such as race and gender.

In analyzing the responses, Tach and Firebaugh found that people tend to compare themselves to others in their age group.

As Tach explained, “If I’m twenty and I’m making $50,000, I will be happier than someone who is forty making $50,000, because relative to my age group my income is higher.”

Tach noted that “people aren’t just comparing themselves to people of the same occupation but to everyone else in the age group across occupations.”

With these results, Tach concluded that “instead of money buying happiness, it’s kind of a story of keeping up with the Joneses.”

While Tach and Firebaugh found that income is more important than gender and education, physical health and marital status were the greatest factors in a person’s declared happiness, said Tach.

Tach and Firebaugh first met when Tach was a research assistant for Firebaugh as a Penn State undergraduate.

They were able to continue working together when Firebaugh came to Harvard as a visiting professor last year.

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