An interesting article in today's WSJ:


In recent years, economists and psychologists have turned their attention to "happiness research" -- and the results are a little disturbing if your life's goals are a bigger paycheck and a fatter nest egg. Money alone, it seems, just doesn't buy a whole lot of happiness.

-- It's all relative. To be sure, high-income earners often express greater satisfaction with their lives. In a 2004 survey, 43% of those with family incomes of $90,000 or more reported being "very happy," versus 22% for those with incomes below $20,000.

But the truth, it seems, is messier than such surveys suggest. Yes, if you live in poverty, more money can bolster your happiness.

......

Researchers have speculated that our happiness is influenced not by our absolute level of wealth and income, but rather by how our financial situation compares with friends and colleagues.

This may help explain why so many high-income earners describe themselves as "very happy." Much of the time, these folks aren't necessarily all that cheerful. But when asked in surveys to assess their satisfaction with their lives, they think about their standing in the world -- and that prompts them to say they are happy.

......

If more money won't make us much happier, what will? Here are four pointers.

-- Keep your commute short. Tempted to use your latest pay raise to buy a big house in a distant suburb? Don't do it.

While we often adjust amazingly well to life's hardships, commuting is an exception. "You can't adapt to commuting, because it's entirely unpredictable," says Daniel Gilbert, author of "Stumbling on Happiness" and a psychology professor at Harvard University. "Driving in traffic is a different kind of hell every day."

-- Choose time over money. Cutting back the hours you work will likely leave you happier, even if it means less pay.

What about the fall in your standard of living? It may hurt less than you imagine. True, you are thrilled when you buy a new car. Soon enough, however, the good feelings fade and you're taking the new car for granted. Academics call this "hedonic adaptation."

-- Think carefully about how you spend your dollars. While a new car may not boost your happiness for long, maybe a trip to Europe would.

"Money itself doesn't make you happy," Prof. Gilbert says. "What can make you happy is what you do with it. There's a lot of data that suggests experiences are better than durable goods."

The car might seem like the better purchase, because it has lasting value. But, in fact, it sits in the driveway, slowly deteriorating. "Experiences don't hang around long enough to disappoint you," Prof. Gilbert says. "What you have left are wonderful memories."

-- Use your leisure time wisely. Surveys show that leisure is better for your happiness than work. But much also depends on how you spend your leisure time.

Passive activities like watching television usually don't make folks as happy as eating. A good meal, in turn, doesn't rank quite as highly as active leisure activities, such as socializing with friends.

"Going to a dinner at a nice restaurant, where you're going to see friends and eat good food, is one of the best combinations," Prof. Schkade says. "The French know what they're doing, when it comes to how to enjoy a good meal."