Headlines Report “Money Buys Happiness,” Missing the Point

Headlines Report “Money Buys Happiness,” Missing the Point

A recent survey from Onetest claims to have found that “Money buys happiness – Up to a point.” News organizations and blogs have published pieces with similarly bad conclusions.

We’re a little bit obsessed with research-backed methods of  finding what we call “the good life.” Imagine my surprise, then, when I saw a number of well-respected news organizations and blogs (and Yahoo news) reporting that money can indeed buy happiness! Is it time to edit one of our most pervasive cultural proverbs: “Money doesn’t buy happiness?”

The “news” comes from the research linked to in the headline above. Onetest was excited enough about the findings in the graph below to make it the center of their press angle:

Life satisfaction by salary range

That looks pretty convincing, right? People who made less money in a year were less satisfied with their life. This was apparently all some people needed to ship the news. Let’s just go ahead and crush this conclusion before more people take it seriously. Sorry everyone, but Onetest’s conclusion is premature and misleading for several reasons.

1. Satisfaction and happiness are not the same thing.

We tend to think of happiness as a sliding scale of sorts, with misery on one end, and happiness on the other. We’ve learned, however, that our minds don’t really work that way. Just as the absence of misery is not the fullness of joy(tm), satisfaction with life is not a joyful life. There might not be anything wrong in your life right now, and you might report low levels of misery and dissatisfaction; however, it would take good things in your life to make you happy.  Nancy Etcoff gives an expert’s view on it if I have failed to convince you:

 …And one of the key points in the science of happiness is that happiness and unhappiness are not endpoints of a single continuum. The Freudian model is really one continuum that, as you get less miserable, you get happier. And that isn’t true — when you get less miserable, you get less miserable. And that happiness is a whole other end of the equation.

2. The survey fails to adjust for life events.

It’s very likely that life events were not preventing the respondents from making more money while also creating some dissatisfaction of their own. One study, for example, found that getting married or having children makes people less satisfied with their work. It’s also a lot harder to work the long shifts that some of the higher-earning positions might demand.

I couldn’t tell whether the figures reported were current or historical income figures. Are we counting people who are presently unemployed in the graph above? E.g. if I were making 60k, but only worked 6 of the last 12 months, would I be reported as making 30k? If so, the results are junk – unemployed people are unlikely to be satisfied with their lives.

3. The survey fails to adjust for industry or job-related factors.

It’s entirely possible that low-paying jobs are also, on average, less rewarding. Consider the two charts below, taken from the same report. The first shows average salary by industry.

Average Salary by Industry

Now compare that to the chart of satisfaction by industry.

Job Satisfaction by Industry

First, where did defense and insurance go on the first chart? And where are human resources and science on the second chart? These omissions make me wary of data manipulation. Second, there are many large  exceptions to the pay-satisfaction rule. Construction, despite being the 3rd best paid, is 12th the satisfaction scale. Those in the environment industry (whatever that means) are the #11 for pay and #4 for satisfaction.

The point is that one cannot conclude that low-paying jobs cause lower satisfaction. It may very well be the case that both low pay and low satisfaction are caused by something not analyzed in the study: factors like a struggling industry or low skill requirements and thus a lack of challenge could – and very well may – cause both low pay and low satisfaction.

4. 2002 grad students from Australia are NOT representative of the world.

While we may generally applaud longitudinal research of this nature, we need to keep in mind that we’re only looking at a very small piece of the puzzle here. Only 8% of the respondents are older than 35.

Onetest grad respondants

I don’t even know what to say about how poorly qualified some of these conclusions are.

There are other potential problems, but I don’t know enough about the research to say for sure. What questions were asked, and in what order? If respondents were asked about their income and job repeatedly, and then asked to evaluate satisfaction, it’s very possible that the answers would take work and pay into account more than they would have otherwise.

What the Findings Do Show

What you can say is that “One year of post-grads in Austrailia reported greater life satisfaction when they made about $150,000.” But that’s not nearly as interesting as throwing academic honesty to the world to proclaim, “Money buys happiness!” Their words, not mine.

By the way, this isn’t the first study that has looked at the relationship between money and happiness. In fact, we already knew a hell of a lot about that relationship based on some excellent science, which makes misleading headlines from a research organization all the more frustrating. I’ll write a more complete analysis of the truths of money and happiness some other time, but Daniel Kahneman sums it up this way:

Clearly, what is happening is money does not buy you experiential happiness, but lack of money certainly buys you misery, and we can measure that misery very, very clearly.


  1. I really appreciate your analysis of the article and of the study itself. So many organizations and people are too quick to proclaim they’ve got some sort of recipe or key for happiness. Their motivations are myriad and mostly disingenuous. It’s good that you’re keeping them honest.

  2. Hi Carson

    We appreciate your interest in our study and the findings reported. I would like to reiterate that this study explored a very specific cohort of individuals who had completed psychometric assessments as part of a graduate recruitment process.

    The discrepancies that you have noted in the charts are not intentional – The first chart illustrates the average salary the respondents start off with while the second chart comprises of the respondents’ satisfaction with their lives in their current job.
    The discrepancy (in industries reported) was due to the omission of industries with limited responses.

    We recommend you have a look at the full report (http://www.onetest.com.au/home/research/2012-10-29/Graduate-Outcomes-Survey-2012) for greater context to the results beyond the media releases. Please note, these results are unique to this group only and should not be generalised beyond this point.

    • Hi there,

      Well said. I’m glad that the author of the comment above understood the limitations of the survey. You’ll note that I have indeed read the full report, as a number of my criticisms (and images) are based on it.

      The research was interesting, and I think it raises some questions worth investigating further. What irked me was the way this ended up in the press. The headline stating, “money buys happiness,” and the suggestion that this survey proved it, was at best overly-sensational. Posting the misleading news.com.au post on Onetest’s own site looks like at least tacit approval of the message.

      Thanks for stopping by, and thanks for the reasonable response,

  3. I think it’s really sad that some still believe that more money more problems but I think that if used properly, money can make a person happy.