A REASON WHY MONEY MAY NOT BUY HAPPINESS. I have posted several times on the new literature about the relationship between income and happiness, and Annalisa made a guest post about the economics of happiness here. Bryan Caplan has a review in the Wall Street Journal ((August 16) of THE HAPPINESS EQUATION by Nick Powdthavee which makes a point I had not thought of. Caplan summarizes Powdthavee’s argument: “If you specifically ask people whether more money would make their life happier, he explains, most would say yes—on the assumption that they would spend the money doing things they like, ‘such as driving nice cars, watching a big-screen TV, or playing golf.’ But in fact, richer people don’t change their activities very much and even tend to be slightly more stressed.” In other words, we think money will change us and our lives, but we stay the same.

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