Does Money Make You Happy?

This video explores the relationship between wealth and happiness, highlighting the concept of hedonic adaptation. It discusses how lottery winners often do not experience long-term increases in happiness and how wealth can lead to social isolation and challenges in managing money.

Pause the video if you'd like to read the transcript. The study showed that months after winning, the average reported levels of happiness among lottery winners had increased no more than that of a control group who hadn't won the lottery. Some winners were actually unhappier than they had been before winning. Later studies have confirmed that our emotional well-being—how often and how intensely we feel things like joy, sorrow, anxiety, or anger—doesn't seem to improve with wealth or status beyond a certain point. This has to do with a phenomenon known as hedonic adaptation, or the hedonic treadmill. It describes our tendency to adapt to new situations to maintain a stable emotional equilibrium. When it comes to feeling happy, most of us seem to have a base level that stays more or less constant throughout our existence. Of course, the novelty of better food, superior vacations, and more beautiful homes can at first make you feel like you're walking on air. But as you get used to those things, you revert to your default emotional state. That might sound pretty gloomy, but hedonic adaptation makes us less emotionally sensitive to any kind of change, including negative ones. The study with the lottery winners also looked at people who had suffered an accident that left them paralyzed. When asked several months after their accidents how happy they were, they reported levels of happiness approaching their original baseline. So while the hedonic treadmill may inhibit our enjoyment of positive changes, it seems to also enable our resilience in recovering from adversity. There are other reasons that winning the lottery may not make us happier in the long run. It can be difficult to manage large sums of money, and some lottery winners wind up spending or losing it all quickly. It can also be socially isolating. Some winners experience a deluge of unwelcome requests for money, so they wind up cutting themselves off from others. And wealth may actually make us meaner. In one study, participants played a rigged game of Monopoly where the experimenters made some players rich quickly, and the wealthy players started patronizing the poor.