You may have been told otherwise, but money really does buy happiness.
People given a five-figure, one-time sum were happier than their peers even months after spending it all, a study found.
In a one-of-a-kind social experiment, researchers at the University of British Columbia recruited 300 people in seven countries — and gave around half $10,000.
They were monitored for six months and compared to a group who went about their normal lives and did not receive money.
By the end of the study, people in the cash group reported feeling happier regardless of how they spent it.
Happiness gains were highest for those who had the least amount of money before the study.
People given a five-figure, one-time sum were happier than their peers even months after spending it all, a study found (file)
Two anonymous wealthy donors redistributed $2million of their money in $10,000 PayPal transfers to 200 people around the world, in partnership with media organization TED.
Three hundred participants were recruited from three lower-income countries — Brazil, Indonesia and Kenya — and four rich countries: Australia, Canada, the US and UK. They were randomly assigned to receive $10,000 cash or not.
The researchers calculated participants’ wellbeing by measuring their satisfaction with life on a scale of one to seven and how often they experienced positive feelings, like happiness, and negative feelings like sadness, on a scale of one to five.
The participants, aged between 21 and 78, were recruited through Twitter in December 2020 and had incomes ranging from $0 to $400,000, with an average of $54,394.
Do smaller amounts of money increase happiness?
Another study in July 2022 by Harvard University gave one-off payments of $500 or $2,000 to 5,000 low-income US residents.
Neither those receiving $500 or $2,000 reported improvements in their financial or psychological well-being up to 15 weeks after they got the money.
Ania Jaroszewicz, a behavioral scientist at Harvard University who led the study, said it shows there is still no scientific consensus about whether money can truly buy happiness.
She told NBC News: ‘There is a lot of mixed research, and a lot of it does depend on the specifics of how much you’re giving, who you’re giving it to, what measures exactly you’re using and so forth.’
The individuals were generally well-educated, with 82 per cent having a bachelor’s degree of higher.
They did not know what they were signing up for, and were invited to apply for a mystery experiment by completing a preliminary survey which collected some personal information and an initial measure of their well-being.
The Tweet said the experiment would be ‘exciting, surprising, somewhat time-consuming, possibly stressful, but possibly also life-changing’.
The lucky two-thirds of participants were sent emails telling them they would receive $10,000.
The 200 people who received the cash were told to spend it within three months, while the 100 remaining individuals did not receive any cash.
Most of the recipients purchased things like cars or spent the money on home renovations.
In the three months after the money was paid, all 300 participants filled out monthly surveys calculating their subjective well-being.
They also completed a survey six months after the money was given out.
The group that received $10,000 each reported greater levels of happiness after the three months of spending than those who did not get any cash.
And at six months, the people who were given the money still felt happier than before the experiment.
The happiness gains were highest for those who had the least. Residents in lower-income countries gained three times more happiness than those living in higher-income countries.
Cash recipients earning $10,000 per year received twice as much happiness as those raking in $100,000.
Those with household incomes of more than $123,000 did not report significant improvements in wellbeing.
As ninety-nine per cent of people earn less than this, the findings imply that one-time cash payments could benefit most of the world’s population.
The researchers recorded how the cash recipients spent the $10,000, and are now looking at whether any specific types of purchases led to the most happiness.
The findings were published in the journal PNAS.
Study co-author Ryan Dwyer told NBC News: ‘Ten thousand dollars in certain places around the world can really buy you a lot. Some people spent a lot of the money paying down their mortgage or doing a big renovation on their house.’