If we’re richer, why aren’t we happier?

Here’s an uncomfortable chart.

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Australians are substantially richer than we were a generation ago. We live longer, travel further, own more, communicate instantly and have access to things previous generations couldn’t have imagined.

We aren’t any happier.

Economist Shane Oliver recently went looking at the economics of happiness and found something economists have wrestled with for decades: once countries reach a certain level of prosperity, more income appears to buy surprisingly little additional happiness.

The reasons are fascinating.

We get used to having more. Our expectations rise with our incomes. We compare what we have with what everybody else appears to have — a habit social media has industrialised rather efficiently.

And some of the things most associated with happiness remain remarkably old-fashioned: spending time outdoors, seeing family, reading, listening to music, shopping and attending sporting or cultural events.

More time on the internet? Not so much.

Our view

None of this means money doesn’t matter. Financial security creates choices, removes some of life’s most serious stresses — not knowing how the rent will be paid, where the next meal is coming from, or whether an unexpected bill can be met — and gives us greater freedom over how we live

But perhaps that’s the distinction.

Money is very good at creating choices. What we do with those choices may be where happiness begins.

Or, as economists might reluctantly concede: apparently there are some things a spreadsheet can’t optimise.

The full article can be found here.