Charles Kenny's weekly Foreign Policy column on money and happiness.
From the Article
By now, everyone knows the paradox of money and happiness, subject of a thousand articles written by penniless journalists. Rich people aren't much happier than the rest of us. But in fact there is a relationship between the two -- it is just the reverse of what most people think. Money may not be able to buy happiness, but happiness can apparently buy money -- happy people become richer than unhappy people over time. Which leads to an obvious policy conclusion: If you want a strong economy, make people smile. In economics, there is a heated argument going on between supporters and opponents of the "Easterlin Paradox," named after Richard Easterlin, a professor at the University of Southern California. Easterlin studied the results of polls that asked questions along the lines of, "When you take your life as a whole, do you consider yourself very happy, somewhat happy, or not happy at all?" When he looked across the world, rich countries were also happier. But when Easterlin looked at changes in average income and happiness poll answers over time, he couldn't find any relationship between the two.