Researchers found that rising income alone cannot contribute to an individual's happiness, which actually depends on the right combo of optimism, wealth and modest desires.
"We've found that rising income does lead to rising happiness, but it depends on people being optimistic, not having sky-high desires, and the average person being actually able to afford more things. So income is helpful, but only in certain circumstances," said Happiness expert and psychologist Edward Diener of the University of Illinois.
Increases in household income were associated with improved life evaluations and more positive feelings. GDP per capita was less related to respondents' feelings of personal well-being than rising personal income.
Increased wealth was primarily linked to improvements in well-being if people were able to purchase more material things, such as a television and access to the Internet, in addition to being more optimistic and satisfied with their finances.
A country's gross domestic product per capita did not have as much of an impact on the average person's happiness, according to research based on responses of 806,526 people in 135 countries from 2005 to 2011.
Researchers gathered data from the first Gallup World Poll, which conducted surveys by telephone and door-to-door visits. Respondents rated their lives on a scale from zero (worst possible life) to 10 (best possible life) and answered questions about positive or negative emotions experienced the previous day.
This new research helps bring clarification to the "Easterlin Paradox," a concept introduced in 1974 that suggested the economic growth of nations does not lead to more happiness, according to Diener.
"According to the 'Easterlin Paradox,' rich individuals are happier than poor ones but rising incomes do not seem to be associated with an increase in happiness," he said.
The study was published by the American Psychological Association.
