Why does money have so much power

Fratzscher's questions of distribution / happiness research: (A lot) money makes you happy

Does money make you happy? Countless scientific studies have attempted to answer this question. The answer is difficult because hardly any causality can be proven. Yet there is evidence that happier people are also more successful professionally and therefore more wealthy. A new study by DIW Berlin focuses on millionaires, i.e. high net worth, and compares them with other groups in German society. The results are clear.

The connection between money and happiness is difficult to describe because happiness is influenced by many factors. Happiness research shows that people who are healthier, have families, are satisfied with their work and live in an intact environment are generally much happier. Men are on average happier than women in most societies. People in a free, democratic society are usually much happier than people in an autocratic or socialist society, even if differences in economic performance are taken into account. It is more complex when it comes to old age: On average, younger and older people are happier with their lives than middle-aged people. So, if we are to understand the connection between money and happiness, we need to consider these other factors as well.

In addition, it is important and at the same time difficult to distinguish between a correlation and causality. Does more money really lead to more happiness causally? Many readers may personally affirm this, but here too the context is much more complex. Because people who are happier may also be more successful professionally and thus earn more money.

Another important distinction must be made between happiness and contentment. Most happiness surveys try to measure the emotional dimension of one's feelings, which often focuses on one's present-day experience. Satisfaction, on the other hand, should be an evaluative, cognitive dimension. So it is a more rational, reflective assessment of the course of one's own life. It is interesting here that people in Germany indicate a relatively low level of happiness in international comparison, i.e. on the emotional level, but on the other hand express a comparatively high level of satisfaction with their life. This tempts some to press Germany into a cliché of rationality and efficiency, even if this often falls short.

The difference in happiness and satisfaction within society and between different groups and regions is also important. Here, too, Germany is exceptional in many ways. Even 30 years after reunification, there is still a relatively large difference in satisfaction between people in East Germany and West Germany, even if one takes into account many other factors that influence this satisfaction, such as income, health, unemployment, working hours, insecurity and age.

The new study by DIW Berlin looks at the differences in life satisfaction between different groups according to their wealth. This shows an astonishingly strong difference in general life satisfaction between millionaires, millionaires and other groups. People in the lower half of the wealth distribution are slightly less satisfied than people in the upper middle class, who in turn are slightly less satisfied than the wealthy. The biggest increase in life satisfaction, however, applies to millionaires, as the graph below shows.

The study looks at specific areas of satisfaction. She comes to the conclusion that millionaires are not only much more satisfied than other groups with their income, but also with their work, their families and their health. You have to know that almost three out of four of these highly wealthy people are self-employed (73 percent), that they are predominantly male (69 percent), live in West Germany (94 percent), have no migration background (86 percent), are predominantly well-educated and middle-aged or older.

There is one consolation for all of us who do not have large fortunes: millionaires have less fun in their lives, it seems: They are no more satisfied with their free time than most, and even less satisfied than people who are wealthy. Perhaps this is also because they work a lot more than others: an average of 47 hours a week, compared to the 37 hours of other citizens. In short, it seems to be true: Money seems to make people happier with their lives, but especially when people have a lot more money.