Money Has Much Less To Do With Happiness Than We Think

Max Nisen | Nov. 12, 2012,

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How individuals motivate themselves and how happiness works is a huge question for researchers. Often, their focus is on people's internal mindset.

A recent NBER working paper from John Helliwell of the University Of British Columbia argues that focusing on the individual is wrong, and that the real source of happiness, ingrained by years of social evolution, is our interaction with other people. 

Helliwell writes:

Income matters less than the chance to connect with others, thereby improving our own lives and especially the lives of others. There is even evolutionary evidence that bulging human brains, and especially their prefrontal cortexes, have been crucial in allowing humans to be the most social beings, living better lives through co-operation. 

Within workplaces, the importance of the social context dwarfs the impact of salary and bonuses. To work where trust in management is one point higher, on a 10-point scale, has the same relation to life satisfaction as a one-third higher income. 

Essentially, money matters, but we're evolutionarily conditioned to be happiest when we feel like we're part of a community, are in a positive social context, and take actions that we feel benefit other people. That significantly surpasses how much we care about money, despite the amount society focuses on it. 

It's a powerful effect, to the point where people that perform positive actions get more out of them than the people they're helping. 

Read more: http://www.businessinsider.com/money-is-less-important-than-social-context-2012-11#ixzz2CcMDxUWk