Experts confirm that money does buy happiness – but only up to £22,100

 

It is widely accepted that money can’t buy you love. Now a new study has found that it can buy you happiness – but only up to a point.

National happiness rises as a country’s gross domestic product (GDP) per capita climbs, but tails off when the rising wealth creates higher aspirations – which often lead to a sense of disappointment, according to the study from the University of Warwick.

In wealthy countries this “sweet spot” is found at around £22,100, after which, happiness decreases as our aspirations for better-quality housing, a higher standard of education and consumer goods lead to increased levels of anxiety and stress.

The paper, published with the University of Minnesota, found that in poor countries life satisfaction rises as GDP climbs, as one might expect.

However, it also found that once average GDP per capita reaches around £22,100, life-satisfaction levels peak – and actually dip slightly in very rich countries.

“As countries get richer, higher levels of GDP lead to higher aspiration. There is a sense of keeping up with Mr Jones next door as people see higher levels of wealth and opportunity all around them and aspire to having more,” Dr Eugenio Proto, one of the report’s co-authors, told The Independent.

“Any economy which  gives its citizens lots of aspiration cannot truly be a bad economy, but this aspiration gap – the difference between actual income and our desire for things like nicer homes and consumers goods – eats away at levels of life satisfaction.”

According to the most recent figures, the UK had a GDP per capita of roughly £22,700, which is above the level at which “satisfaction appears to dip”.

Dr Proto said: “There is also a question of inequality to consider here. It could be possible that our hypothetical Mr Jones is way richer than you, and your aspiration of keeping up with him is totally unrealistic. So it’s no surprise that the happiest countries are Denmark, Sweden and Finland – those that are most equal.”

In developing countries with a GDP per capita below £4,100, people were 12 per cent less likely to report the highest level of life satisfaction than those in countries with a GDP per capita of around £11,000.

Happiness studies are increasingly important to policy-makers, and Dr Proto says the World Bank is interested in his research.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Cancer Research UK: Corporate Partnerships Volunteer Events Coordinator – London

Voluntary: Cancer Research UK: We’re looking for someone to support our award ...

Ashdown Group: Head of IT - Hertfordshire - £90,000

£70000 - £90000 per annum + bonus + car allowance + benefits: Ashdown Group: H...

Ashdown Group: Application Support Analyst - SQL Server, T-SQL

£28000 - £32000 per annum + Excellent benefits: Ashdown Group: Application Sup...

Ashdown Group: Systems Analyst / Data Analyst (SQL Server, T-SQL, data)

£28000 - £32000 per annum + Excellent benefits: Ashdown Group: Systems Analyst...

Day In a Page

Major medical journal Lancet under attack for 'extremist hate propaganda' over its coverage of the Israeli-Palestinian conflict

Lancet accused of 'anti-Israel hate propaganda' over coverage of Gaza conflict

Threat to free speech as publishers of renowned medical journal are accused of inciting hatred and violence
General Election 2015: Tories and Lib Dems throw their star names west to grab votes

All noisy on the Lib Dems' western front

The party has deployed its big guns in Cornwall to save its seats there. Simon Usborne heads to the heart of the battle
How Etsy became a crafty little earner: The online market has been floated for £1.2bn, but can craft and capitalism coexist?

How Etsy became a crafty little earner

The online market has been floated for £1.2bn, but can craft and capitalism coexist?
Guy Ritchie is the latest filmmaker to tackle King Arthur - one of our most versatile heroes

King Arthur is inspiring Guy Ritchie

Raluca Radulescu explains why his many permutations - from folk hero to chick-lit hunk - never cease to fascinate
Apple Watch: Will it live up to expectations for the man or woman on the street?

Apple Watch: Will it live up to expectations?

The Apple Watch has apparently sold millions even before its launch tomorrow
Don't fear the artichoke: it's a good cook's staple, with more choice than you'd think

Don't fear the artichoke

Artichokes are scary - they've got spikes and hairy bits, and British cooks tend to give them a wide berth. But they're an essential and delicious part of Italian cuisine
11 best men's socks

11 best men's socks

Make a statement with your accessories, starting from the bottom up
Paul Scholes column: Eden Hazard would be my Player of the Year – but I wonder if he has that appetite for goals of Messi or Ronaldo

Paul Scholes column

Hazard would be my Player of the Year – but I wonder if he has that appetite for goals of Messi or Ronaldo
Frank Warren: Tyson Fury will be closely watching Wladimir Klitschko... when he wins it'll be time to do a deal

Frank Warren's Ringside

Tyson Fury will be closely watching Wladimir Klitschko... when he wins it'll be time to do a deal
London Marathon 2015: Kenya's brothers in arms Wilson Kipsang and Dennis Kimetto ready to take on world

Kenya's brothers in arms take on world

Last year Wilson Kipsang had his marathon record taken off him by training partner and friend Dennis Kimetto. They talk about facing off in the London Marathon
Natalie Bennett interview: I've lost track of the last time I saw my Dad but it's not because I refuse to fly

Natalie Bennett interview: I've lost track of the last time I saw my Dad

Green leader prefers to stay clear of her 'painful' family memories but is more open about 'utterly unreasonable' personal attacks
Syria conflict: Khorasan return with a fresh influx of fighters awaiting the order to start 'shooting the birds'

Khorasan is back in Syria

America said these al-Qaeda militants were bombed out of the country last year - but Kim Sengupta hears a different story
General Election 2015: Is William Cash the man to woo Warwickshire North for Ukip?

On the campaign trail with Ukip

Is William Cash the man to woo Warwickshire North?
Four rival Robin Hood movies get Hollywood go-head - and Friar Tuck will become a superhero

Expect a rush on men's tights

Studios line up four Robin Hoods productions
Peter Kay's Car Share: BBC show is the comedian's first TV sitcom in a decade

In the driving seat: Peter Kay

Car Share is the comedian's first TV sitcom in a decade. The programme's co-creator Paul Coleman reveals the challenges of getting the show on the road