Andrew Gibson, Kieran Francis, Harriet Brown, Emily Williams, Claire Massett and Felicity Lindsay

Research Paper 1 From Wealth to Well-Being? Money matters, but less than people think. Aknin et al Research Paper 2 Money and Mental Well-Being: A longitudinal study of medium-sized lottery wins. Gardner et al. 2006

 People are obsessed with money  Concern about losing money  More time spent at work  Assume that more money leads to greater level of happiness

 Study 1 – To find a link between household income and happiness  Study 2 – To assess how happy participants will be with different levels of income

 429 Americans asked to report and predict happiness levels  Part of wider online survey where points could be redeemed for prizes  Asked to rate their life satisfaction on a scale 0-10  Asked to predict life satisfaction of 10 people with different household incomes

Actual and predicted happiness levels for the 10 household income point estimates

 Higher levels of income associated with greater level of happiness  Moderate correlation found  Accurate prediction about higher household income being linked to increased happiness  Vastly underestimated the happiness of people earning lower levels of household income

 315 Americans from same research pool as used in Study 1  Identical methodology to Study 1, but instead participants were asked to predict how happy THEY would be with different levels of income, before making predictions for others  Predicted Study 2 would mispredict association between money and happiness, whether or not it’s in reference to themselves

Actual and predicted happiness levels for both oneself and another at the 10 household income point estimates

 People accurately predicted the emotional benefits of being rich, but vastly overestimated the emotional cost of being poor  Believe money and happiness more tightly linked than in reality, overemphasising the importance of money  People work harder, driven by the fear of loss  People spend more time in the office to get more money – sacrificing family and leisure time

 American population only  Surveys attracted certain demographic  No mention of the right to withdraw from the study  May not answer truthfully  Possible other reasons for level of happiness  Previous income was not taken into account

 Statistically well-determined link between income and reported wellbeing  Natural experiment using lottery winners’ data  Used a standard mental well-being measure contained in BHPS called the GHQ score  Longitudinal as opposed to cross-sectional study

 12 question survey  Psychological health questionnaire (GHQ-12)  33,605 observations  4,822 “Medium winners” / 137 “Bigger winners”  Control group – No win / Medium winners  Experimental group – Bigger winners

Table1 shows the average wins of the groups and the relevant GHQ scores

 Gender differences  Demographics don’t matter for big wins  People who have a higher GHQ level were more positively affected by big wins  Evidence is robust

 Winning the lottery shows some improvement on mental health  Higher income houses have a lower GHQ after winning the lottery than those from lower income households  Supports evidence of Diener et al. (2002)

 No previous knowledge of participants’ wealth  Only UK sample used  Stopped using certain data during study with no stated reason  No mention of ethics  No p value – no test of significance  Lower income households more likely to play lottery

Graphs to demonstrate how the differing range in Y axis values can influence our interpretation of results

 Both studies show a very slight link between money and happiness  Both point to other factors having a greater effect on happiness  Both studies use similar research methods

 There is an apparent link between money and happiness  Financial resources appeared to act as a mechanism translating life circumstances into life satisfaction (Diener 2002)  People may lie about happiness  Other factors  Type of expenditure Dunn et al.  Attitude towards money Vohs et al.  Status Nettle 2005

 Money and happiness appear to link  Not the only cause of happiness  Just because you have money does not mean you will be happy

 Aknin, L., Norton, M., & Dunn, E. (2009). From wealth to well-being? Money matters, but less than people think The Journal of Positive Psychology, 4 (6),  Diener, E. Biswas-Diener, R. (2002). Will money increase subjective wellbeing? Social Indicators Research 57,  Dunn, E. Aknin, L. And Norton, M. (2008) Spending Money on Others Promotes Happiness Science 21Vol. 319 no pp  Gardner, J. & Oswald, A.J. (2006). Money and mental well-being: A longitudinal study of medium-sized lottery wins. Journal of Health Economics, 26,

 Johnson, W., and Krueger, R. F. (2006). How Money Buys Happiness: Genetic and Environmental Processes linking finances and life satisfaction. Journal of Personality and Social Psychology, 90,  Kahneman, D., Krueger, A., B.Schkade, D., Schwarz, N. & Stone, A.A. (2006). Would You Be Happier If You Were Richer? A Focusing Illusion Science, 312 (5782),  Nettle, D., 2005b. Social Gradients in Subjective Wellbeing: Is It Money or Person Control that Matters? Department of Psychology, Brain and Behaviour, University of Newcastle: working paper.  Vohs, K. Mead, N. Goode, M. (2006) The Psychological Consequences of Money Science 17 Vol. 314 no  Haisley, E., Mostafa, R. and Loewenstein, G. (2008), Subjective relative income and lottery ticket purchases. J. Behav. Decis. Making, 21: 283– 295.