Does Money Buy Happiness?

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  • Topic: Lottery, Mega Millions, Powerball
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  • Published : April 16, 2011
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Does Money Buy Happiness?
Donald Tolbert
John Brown University

Executive Summary
The subject of this paper is the age-old question, “Does Money Buy Happiness”. On the surface, this question appears to be an easy one. Happiness however, is a subjective item. To better answer this, several points must be analyzed such as, “What is happiness?”, “How is it measured?” etc. To better streamline this process, a research question was developed: * “Does an increase in personal income cause individuals to have a change in their level of well-being?” In an effort to answer this question, several conflicting views were examined and several individuals were interviewed who had financial windfalls to determine the effect that an increase in income had on their well-being. The findings initially appeared to suggest that money buys happiness to a degree. Upon further review however, the results are mixed. Several people who came into money due to lottery winnings or inheritance have gone broke because they didn’t have a plan in place to deal with the money. Others had more fun giving away most of their fortune to those they felt needed it more than they did. This paper will note the details behind these interviews and articles to better determine if there is actually an answer to the initial question, “Does Money Buy Happiness?”

Statement of the Problem
Background and Introduction
The question of “Does Money Buy Happiness?” has been around for about as long as there has been money. The idea that great wealth brings great joy is almost universally shared, but rarely true. The individual who has acquired wealth suddenly usually has neither the training nor the self control to make it last and use it to the fullest benefit. Examples abound, but those presented here reflect the results of several individuals who received a windfall and their struggles to make it a worthwhile gift. In addition, an investigation is made into whether or not money does buy happiness using examples of polling, well-being indexes, and a variety of surveys. Hypothesis

H0: Lottery Winners are no happier than other income groups. H1:Lottery Winners are happier than other income groups. It is hypothesized that increasing one’s personal income will have no effect on the degree of personal well being. The following research will illustrate that in most cases, the null hypothesis is true, with certain exceptions. Variables Defined

To better understand how money affects happiness, happiness itself must be defined. Happiness, according to Webster’s dictionary, is defined as “The state of being happy; joyousness.” ("Happiness," 1966). Being happy is defined by Webster’s as: “Enjoying life, contented…” ("Happiness," 1966). The inference might be taken that to be contented requires more money, or to enjoy life requires more money. Literature Review

Several examples of an increase in personal wealth have indicated that it brings no increase to the degree of well being an individual experiences. In fact, it sometimes illustrates the exact opposite. Take into consideration the stories of Arnim Ramdass and Denise Rossi. Both won large sums in the lottery and both decided that keeping the proceeds for themselves was the best action they could take. After winning $19 Million in the South Florida lottery, Mr. Ramdass subsequently left his wife and disappeared, refusing to pay the house payments and bills. His wife, Donna Campbell, a former beauty queen, started having problems when Mr. Ramdass “bought the winning ticket in a pool with his co-workers, mechanics at the Miami International Airport, in June 2007. The jackpot was worth $19 million, but they collected a lump sum of $10.2 million and, after taxes, each got about $450,000” (Bhatt, 2009). In this instance, while the husband might have experienced a momentary increase in his personal well-being, the overall effect of the increase in personal wealth led to a dramatic...
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