Money DOES Buy Happiness | Scientific Research Explained


The age old question. Does money buy happiness? I often hear the 2010 study by Kahneman and
Deaton cited as the decisive study concluding that making anything more than $75,000 a year won’t
make you any happier. But is that true? In this video, we’ll go over the new research
and explain what the research really has to say about wealth and wellbeing. What’s going on guys, Dr. Jubbal, MedSchoolInsiders.com. For those of you who are new here, I graduated
with my M.D. in 2017 and matched into plastic surgery, which I ultimately quit. You can learn the story on my vlog channel. After publishing and presenting dozens and
dozens of peer reviewed papers and abstracts (you can find the full list on my personal
website), I’ve developed an astute sense of research methodology, analysis, limitations,
and even the research culture. I constantly hear studies being misquoted or misattributed,
and so I’ve decided to start a series of videos that debunk common misunderstandings
and misconceptions of the scientific literature. We’ll be starting with money and happiness. First, let’s talk about the most commonly
quoted study when it comes to money and happiness, Kahneman and Deaton’s study from 2010 titled
“High income improves evaluation of life but not emotional well-being”. Funny enough, the title says nothing about
happiness, in fact, it even states that money doesn’t improve emotional well-being, but
everyone seems to think it does. The authors define two types of wellbeing:
emotional well-being and life evaluation. Emotional wellbeing is the quality of a person’s
everyday experience such as joy, fascination, anxiety, sadness, anger, and affection. Life evaluation refers to a person’s thoughts
about his or her own life on a longer time scale. The main conclusion of the study was that
people’s life evaluations rose steadily with income. The authors interpreted the findings that
more money did not buy happiness, but rather less money is associated with emotional
pain. Based on their results, perhaps $75,000 per year is
the threshold beyond which further increases in income no longer improve their ability
to do what matters most to their emotional wellbeing, such as spending time with people
they like, avoiding pain and disease, and enjoying leisure. Right off the bat, there are limitations in
that the study doesn’t account for drastically variable costs of living by region or city,
and as this study was done close to a decade ago, we need to factor in inflation for our
current understanding. Beyond that, the highest income bracket was
simply defined as “greater than $125,000 per year”, net worth was not included, and
the sample had a very small number of participants making in the 6 figure range. Lastly, and most importantly, this study,
and the ones that follow, are all cross-sectional studies. Without going into the types of study designs,
understand that cross-sectional studies can never demonstrate causation. Only correlation. And in science, the findings from a cross-sectional
study are not nearly as strong as a well designed prospective study. Ok so what does the scientific literature say now?
Donnelly and colleagues published a paper titled “The Amount and Source of Millionaires’
Wealth (Moderately) Predict Their Happiness.” This Harvard Business School study surveyed
over 4,000 millionaires on various factors, from their net worth to income, marital status,
employment status, country of residence, gender, age, etc. And unlike Kahneman’s study, they looked at
factors beyond income, including net worth. Their conclusion? Two factors were most significantly correlated
with improved levels of happiness: first, a net worth of*$10 million or greater, and two,
earning your wealth rather than inheriting it. Wait a minute! Now I need to have a net worth of $10 million
to be the happiest? Not quite. Again, taking any single study as gospel is
dangerous. And again, this is correlation, not causation. Other studies, such as Boyce and colleagues from 2010
suggest that an individual’s relative ranking of their income compared to others is more
important than their absolute wealth. Ok, So How Much Money Do I Need to Be Happy? If I were to blindly go off the conclusions
of these studies, I would tell you to make $75,000 per year and have a net worth of $10
million or more, which you had to have earned rather than inherited. Again, make $75k per year and have $10 million
in the bank that you earned. Starting to see why this doesn’t make sense? No single study should be treated as the singular
truth. And every single study has limitations. Even the well designed ones. Aknin et al in 2009 demonstrated that people
place too much emphasis on accumulating wealth. We think more money makes us happier than
it actually does. We spend more time at work, grinding, putting
off time with friends and loved ones because we believe moving up the ladder and making
more money will make us happier in the end. So perhaps there’s something else we aren’t
considering. Could how we spend our money be more important
than the actual dollar amount? Gilovich and colleagues as well as Van Boven
et al. demonstrated that spending on experiences and spending on others was associated with
greater happiness than spending on material goods. Dunn and colleagues demonstrated that giving
to charity was also more happiness-inducing than spending on material goods. At this point, I’d like to invite you to
take a step back. There are no easy answers in life. Sure, giving to charity and spending on experiences
will make you happier than buying goods, according to a study. But if you’re struggling to make ends meet
and put food on the table, will you maximize your happiness by spending money on healthy
groceries or on a vacation to South Africa? Blanket statements summarizing any study are
misguided and ignorant. Out of the people who tout the statistic that
you don’t need more than $75,000 per year to maximize your happiness, how many do you
think actually read the study? How many have a research background or can
at least critically analyze the merits and limitations of a study? The ability to think for yourself and filter
incoming information is one of the most underrated skills in our current time. We want to be spoon fed all the answers. Doctors should always know what’s wrong, and Google
should answer all of my questions. The reality is, as humans, there’s so much
that we don’t understand, and there are still gaping holes in the scientific literature. Instead of focusing on a certain number to
justify your behavior or lack of behavior, create a life on your terms. Mindfully and deliberately ask yourself, “What
will make me happy? What kind of life do I want to live?” If I thought money was the answer to happiness,
I wouldn’t have left one of the most competitive and lucrative fields in medicine, especially
after spending years in college, medical school, and grinding my way into a plastic surgery
residency. But by appreciating the scientific literature
for what it is, and for what it isn’t, I determined it’s more important to me to
make a lasting impact on the world and on medical education. I want my legacy to be ending medical student
and resident suicide. If I make plastic surgeon money in the process,
awesome. And if not, I’ll still be happier in the
end. Thanks for watching. If you find our content helpful, please consider
supporting us on Patreon, where you can also get exclusive behind-the-scenes access. See you guys in that next one.

100 thoughts on “Money DOES Buy Happiness | Scientific Research Explained

  1. I really enjoyed this. Such an excellent analysis of the studies and great teaching points at the same time. Keep up the great work, Dr. Jubbal!

  2. If you don’t have anyone to spend the money with it gets boring, I buy all the new games technology shoes etc even buy women from time to time but at the end of the day I still can’t fill that empty void of a companion 😢

  3. This was a great video 💗 there’s a much deeper understanding to achieving happiness than just relying on a bank statement, although it helps us get our basic needs to take care of ourselves. I do believe too that it is about the impact we make on others and leaving a legacy. even in your videos you are leaving this impact to others and me! Love it all 😍✨

  4. This beats reading through the literature on my own. 🙂

    … And, of course you have to drop the ball at the end that we should read the papers and make our own conclusions anyway. :/

  5. I’ll definitely be a lot happier when I win the power ball or mega ball.. I’ll be able to help others which makes me happier

  6. Have you read Dr. Pamela Wible’s Physician Suicide Letters book yet? It’s definitely inspired to try to combat it, and I commend your efforts to that cause! Godspeed.

  7. I remember having "critical thinking" as a part of our curriculum in grammar school. We we're asked how we would solve a problem and discuss different strategies in achieving desirable results. In this society, we are taught how to think and what to do. Some of us are fortunate to have parents or guardians who've raised us to be inquisitive and challenge the system. You have to be able to form your own opinions and thoughts in order to "think for oneself and sift through information." Ppl who are striving versus ppl who are thriving have different mindsets. Money is a tool. It's easier to go with the "current" than it is to go against it. If we spent more time learning about self, we'd be happier and at peace.

  8. I feel like we should also look at the way we view the statement.

    The phrase isnt neccessarily saying that happiness increases in increments that correlate to the amount of wealth said person has. Ie as W (wealth) increases, then H (happiness) also increases.

    Is says that money, at any amount, doesnt buy/equal happiness.

    However this phrase in itself makes is illogical because an emotion cannot literally be purchased.

    Now if we look at happiness as a secondary emotion we can see that happiness isnt the only reason someone may want to acquire wealth. Ie money buys power that translates to happiness. Or money buys oppurtunity which equals happiness. From this perspective it could be argued that anything that a person chooses to do with their money, could be "buying happiness". For eg the pet lover that buys a cat could be buying their happiness. Or even on a smaller scale, paying you electric bill in order to have a hot showers that gives you tingles = buying happiness.

    From a sociological POV I think its fair to say that for the 13.4% of Americans that live in poverty, who daily deal with the stress anxiety and unhappiness that poverty brings – money could buy their happiness. Or rather money coukd be used to bring them happiness.

    We live in a capitalist world where everything is monetised.

    Health care, college tuition, safe housing, nuitritous food. They all come with a price point, often hefty, and can leave those in poverty very very unhappy.
    Can poverty, hunger and lack or eduction equal happiness? Absolutely not. Does your favourite meal make you happy? Yes. And did you buy it? I hope so.

    In this respect I think it can be argued that yes, money DOES buy happiness.

    Is that to say people in poverty dont experience happiness? No. Its to say that people in poverty doesnt experience happiness as a result of their poverty.

    So if we strip this phrase down and address it in the binary that its presented in;
    A) It can be argued that if poverty = unhappiness, then wealth (as its opposite) must = happiness.

    And in a less literal senses B)
    money can buy [the things that incite] happiness.

    No?

  9. Hi Dr .jubbal ,you are doing a great job ..your content are really informative..thank you… .. am in med school ….am a bit confused on what speciality to take up …pls make a vedio on how to choose speciality. … your vedios are superb….so pls do make one….

  10. The things you own ends up owning you. Happiness doesn't require money status power or intelligence. The person needs to change his nature towards trivial human desires and aversions and instead liberate his mind from unhealthy attachments. The wise man who can let go of the petty pleasures of the peasants will accumulate all the things he no longer craves or cling on to will naturally start accumulating these things in abundance in any case. To have everything and to be happy requires that you let go first, just let go.

  11. Thank you for an awesome video! As a first-year medical student, I really appreciate all the work you are doing on your channels. I find your tips extremely useful both for studying and personal growth. Your goal about reducing the rate of suicides among students and residents deserve so much respect.

  12. Why didn't this video include theory of Hedonic adaptation? Or any mention of Martin Seligman who is the pioneer of the field you're looking at, positive psychology?

    There are so many missed opportunities here… Like the PERMA model of wellbeing and where money fits and doesn't fit in.

  13. Money = security, better food, better living place, better education to give to their child's, better environment, better medical stuff etc = happiness

  14. So true! There's commonly some kind of misinterpretation on scientific literature when translated into plain English, and rarely look at whether it's correlation/causation.

    What I love is how you look into each different aspects and explain them well. Thanks for this amazing eye opener!!

  15. A short answer is yes, but that is honestly short term happiness. After a while no matter how much money you have , the fancy car,big house ,or whatever, get boring and just a part of a regular day. Honestly in the end you can't take anything with you , and you cant buy time. In the moment money might seem amazing but the root to evil is money, so up to a certain extent it can, and can't (buy happiness)

  16. Your last point was amazing, bro. I totally agree that we have to create our own meaning. That is a lot more sustainable than chasing happiness. I hope that you are successful in ending medical school and resident suicide.

  17. Great video J

    I am compelled however to point out the irony in this video. In your self-displine video in May last year, you cited a Baumeister study on willpower being a finite resource (I.e., ego depletion). Due to publication bias (among other things) other researchers have been unable to replicate this finding, and as a result, this notion has been disregarded by most academics in this field (a simple Google search of papers written about the replication crisis in psychology will confirm this).

    You make a great point that people summarizing studies on the internet in an easily digestible manner can often make the findings misleading. But perhaps you may want to update that video in taking your own advice…

    Anyway, food for thought. Thanks again for sharing, you do a great job.

  18. Excellent video. The honesty and straigthforwarddness of it, makes it so interesting. This Is how all information we get, should be approached. Thank you so much!

  19. I thought I came here to find how much to try and make annually to find a more secure and there for comfortable living in a few circumstances

  20. Money is really the last thing that could make me happier.
    Living below the poverty line is thought to be harsh, not even livable. But it could not be further from the truth!
    Half of my income goes to renting my big enough studio apartment, a third to living and the other 1/6th are spent on classroom material.
    Of course I do earn more than that, but every month I save half of my income for future use. If I have children someday we'd all be better off if my partner or I would stay with the children.
    If I ever need a car I'd be better off saving for it rather than paying (more!) afterwards.
    When I'll buy my land, the more money I can put in it without borrowing, the more I save (positive interests instead of negative!).
    If something happens andi cannot work anymore, I know I'll have enough to keep on living for at least 3 years (I am just starting my career).
    Living simply is easy… Living in clutter is hard.

  21. Money is a physical thing. It cant buy emotions. I know alot of people who have an income of $100,000 per month and aren't happy. There is something beyond money… I don't know why people with millions or billions of dollars commit suicide…and there are people who are homeless and are happy.

  22. Excellent. Deep, thoughtful, critical. Thanks for the quality & attention to detail you're putting into your videos.

  23. As someone who grew up poor, having my children grow up with a sense of financial security is more important than my own personal satisfaction.

  24. Great video, but sometimes the reason why doctors don't know what's wrong is because 8/10 they let their arrogance take the lead.
    Awesome video though! Loved it.

  25. U think id like to work most random dental cases if i had a ton of money? Hell no id just focus on my health family and probably work 4hours a day.. so money=happiness

  26. You are on such a great mission and this video was something other than the bookish material and quite practically helpful. Thanks a lot 👍🏻

  27. I've never commented on a video before but I really liked this video! Hope to see more of this content. I cited that fact from the Kahneman study in past conversations lol… and never thought about it in that way, so thank you. Since graduating from college, I've thought a lot about happiness too. In Crazy Rich Asians, Nick's mom says to Rachel how chasing her dreams and happiness is very American. Do you agree with this or do you think its universal?

  28. Been watching your videos for a while. Definitely helped me create momentum and facilitate better habits. Thanks for all the insight!

  29. You’re the coolest dr I’ve ever seen!! The ideas and techniques that you been sharing with us are precious. As an M.Sc grad I just wish we had every piece of your advice back in school 😭😭. But thankfully we have you now!! Please keep making great videos and you are changing the world!

  30. Being a college freshman and having access to peer-reviewed articles for the first time, I realized that there was a lot that could be misinterpreted or something in the article itself was false. I really appreciated this video and I'm excited to see similar ones in the future!

  31. Thank you for this. A good friend of mine informed me that “milk is bad for Parkinson’s” (my husband has this condition). This sounded odd to me, so I went on a Google search to find the study she was referring to. Mind you, I assume she had not actually looked at the study, but instead had read an article referring to this study. The study showed a correlation between having consumed low fat liquid milk and yogurt in childhood with increased chances of having Parkinson’s as an older adult. NOT that milk was “bad” for people with Parkinson’s. So many misunderstandings can happen by not spending a little extra time to look at the information.

  32. one criticism I would give is that you don't actually point out your own conclusions based on the information. You just say that people's conclusions on the study are wrong (which from what I gather is true). do you think the 75k study demonstrates anything? or does the methodology of the study keep it from being able to provide any true insights?

  33. Still can’t believe you dropped your plastics residency Dr. Jubal, is there any chance you would be permitted to return to your training IF you decided you wanted to go back?

  34. I am very happy volunteering for my community and donating to worthy causes. I spend most of my money on experiential ones–vacations with families and medical missions.

  35. Are you criticizing research in general or this particular research? Your counterarguments were not specific to the idea you're arguing against. Very general to every topic or research. No need to put a specific title then give general criticisms.

  36. Money doesn't buy happiness but the things that make you happy, usually require money. It's almost impossible to be happy without sufficient income in the modern society.

  37. Do more content like this! I appreciate content that compares and analyses with neutral perspectives ( with your own opinions as well)

  38. Love this lol question everything…people think research is so concrete when it’s not & like you mentioned, people also fail to critically analyze all aspects including the flaws of studies as well

  39. I do not think that most people will ever think for themselves or want to learn to think for themselves because people that usually do this do it out of a desire that I believe is innate. Those that do think unfortunately have a responsibility towards those that do not think so well.

  40. Let’s be honest … u know most people go to med school for the money… I don’t understand why admitting that is so shameful!

  41. Money doesn’t equal happiness. Money equals security. Money equals choices,which can make us happy. Money also gives us time to play, which includes nice restaurants, cars, clothes, etc. it’s what you do with it that makes you happy. I like nice cars, so I need a high salary to allow me to keep purchasing and enjoying my car hobby. That’s it. It allows you to do things. What makes you happy? Is there something that you enjoy doing which makes you happy which money can assist with? That’s really it. I also like to eat out a lot. Money let’s you do that.

  42. I know rich people with depression. I make more money now but I'm also more depressed because like the video states, spending money helping others thus seeing the impact will make you happy. I have experienced that when the students I tutored for free thanked me a year later when they qualified for apprenticeships and tertiary. It made me happier than when i bought myself a new phone that most in the company couldn't afford.

    The issue isn't can more money make you happier , it is how much is enough? There are billionaires that live ordinary cheap lives while the poor are dying trying to act rich. If you're content with what you have and not lusting after what your neighbor has, youll be happier cause if you don't have what they have it means you never needed it in the first place. Thus in the end, most things we buy are a result of the things we see and envy, not what we thought we needed. Cause if you realize how your iPhone user friend was struggling to buy a new iPhone charger or pay for a music subscription you wouldn't buy it as you would realize its not worth it.

  43. This is one of my favorite videos of all time when it comes to the question "Does money buy happiness?". I have been saying this every time i hear people say "it doesn't". Everyone is different, there are so many factors such has home life, work life, relationships with friends and family, personal outlook on life and personal goals. Some people are content with living frugal and money may not personally make them any happier. But for others (myself included) money may be the most desirable thing in life. I make between $60k-$65k a year, for alot of people that sounds like a ton of money. For me, it barely satisfies me. I grew up lower middle class/poor, not having very much for myself or my family, but we got by. Personally, i don't want to have to worry if i have enough in the bank to make a certain purchase or to spend a little more than normal. I have been told that i have expensive tastes, but i have been on the opposite side not being able to afford anything. So for me, money does buy MOST of my happiness, of course if i didn't have my friends, or my family than i wouldn't be as happy, but realize that would be true even if money wasn't a factor. I believe that true happiness is like a puzzle, if you don't put all of the pieces together, then it wont be complete, same thing for happiness. In order to be truly happy you need money but you also need all the other pieces such as good health, great friends, loving family, etc..

  44. If you say money doesn't buy happiness you are correct happiness is what you make out of it without money you have nothing,no resources, no net worth you are basically broke for me money buys me happiness I can't speak for anyone else but myself

  45. this is stupid, ya iam not gonna be happy making 75 k a year with no life, but i will sure as shit be happy not working and having 5-20 million in the bank, money does buy happiness and it sure as hell buys freedom.

  46. What I really find interesting is why we care so much, why probably over a million people will watch this video. Obviously it's ingrained into almost all of us to care about money whether we believe it or not

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