In my last post, In the Pursuit of Happiness — Part 1: National Happiness, I discussed a number of articles about how researchers are trying to measure national happiness. One study concludes that countries can be happy regardless of high taxes, rugged terrain, poor weather, or low income. Another study concluded that income is a significant variable in national happiness. One study claimed that freedom of choice was the most important factor determining national happiness while another study indicated that watching too much television was detrimental to national happiness. In the end, I pointed out the obvious — happiness can only be measured one person at a time.

Let’s face it. People want to be happy. We take our children to Disneyland and Disney World because they are “the happiest places on earth.” We throw parties, go to movies, attend the theater, enjoy concerts, play games, and read books in the pursuit of happiness. Eventually, we must return to the real world where we face business pressures, mean-spirited politics, school bullying, and religious differences. Edith Warton observed, “If only we’d stop trying to be happy we could have a pretty good time.”

Marshall and Kelly Goldsmith assert that “the results of a … survey on satisfaction—at home and at work—may surprise you [“How Adults Achieve Happiness,” Bloomberg BusinessWeek, 10 December 2009]. They continue:

“How does an adult achieve a high level of contentment while living a frenetic and distraction-packed life? The two of us have just reviewed results from our new survey designed to elicit insights into short-term satisfaction (happiness) and long-term benefit (meaning)—both at work and away from it. Our respondents weren’t randomly chosen. They’re well-educated (more than 60% have graduate degrees) managers, entrepreneurs, and professionals (split almost evenly between the sexes), numbering over 3,000. Our findings were in many cases unexpected but clear-cut. There is an incredibly high correlation between people’s happiness and meaning at work and at home. In other words, those who experience happiness and meaning at work tend also to experience them outside of work. Those who are miserable on the job are usually miserable at home.”

Duh! No surprises there. What might surprise you (or not) is that the Goldsmiths claim that personal attitudes rather than the personal circumstances are what determines whether we are happy or unhappy. They continue:

“Since work and home are very different environments, our experience of happiness and meaning in life appears to have more to do with who we are than where we are. Rather than blaming our jobs, our managers, and our customers—or our friends, family members, and communities—for our negative worklife experience, we might be better served by looking in the mirror. One commonly expressed excuse for not getting more happiness and meaning out of life is: ‘I’m working too many hours.’ But our results show that the number of hours worked had no significant correlation with happiness or meaning experienced at work or at home. So much for that excuse.”

The Goldsmiths delved deeper into variables at work that could affect happiness and found few of them made much of a difference. They explain:

“Part of our survey asked respondents to rate their overall satisfaction level at work. Again, our findings paint a clear picture. The amount of time respondents spent solely on stimulating activities (high short-term satisfaction but low long-term benefit) had no bearing on their satisfaction at work. The same was true of more purposeful activities (low short-term satisfaction but high long-term benefit). Overall satisfaction at work increased only if both the amount of happiness and meaning experienced by employees simultaneously increased. This indicates that professionals don’t gain satisfaction at work either by being ‘martyrs’ or by ‘just having fun.’ Companies may want to reduce communications designed to encourage employees to make sacrifices for the larger cause. They may also want to cut out ‘fun’ morale-building events that lack a meaningful purpose.”

The Goldsmiths indicate that they “had (mistakenly) guessed that those who spent more time outside of work in activities that produced more short-term satisfaction might score higher on overall satisfaction.” In other words, they believed in the old aphorism “work hard and play hard.” They continue:

“After all, we assumed, people don’t go home to find meaning; they want to relax. We were wrong. The correlations between happiness, meaning, and overall satisfaction at work and home were very similar. Those who were more satisfied with life outside of work were the respondents who reported spending more time on activities that produced both happiness and meaning.”

Mark Twain once wrote, “The best way to cheer yourself up is to try to cheer somebody else up.” Apparently he was correct. Here is what the Goldsmiths concluded from their survey:

“These links between how we spend our time and how we feel may seem confusing, but specific patterns arose—some commonsensical, some not. Here are a few quick takeaways from our initial research:

• Reduce TV watching. It’s stimulating but doesn’t increase overall satisfaction with life—at work or home.
• Cut back on surfing the Web for non-professional reasons. It’s negatively correlated with the experience of both happiness and meaning.
• Do as few chores as you can (whatever that word means to you).
• Spend time exercising and with people you love (respondents who did this had more satisfaction with life at work and at home).
• Feeling challenged is linked to greater satisfaction, so challenge yourself.

What can companies do differently? They might stop asking, ‘What can the company do to increase employees’ experience of happiness and meaning at work?’ which encourages dependency. Instead, managers can encourage employees to ask themselves, ‘What can I do to increase my experience of happiness and meaning at work?’ This strategy may produce a higher return in employee commitment—and do so at a lower cost.”

While the Goldsmiths focused on the correlation between happiness at work and at home, behavioral economist Nick Powdthavee focuses more on personal associations and activities [“We all want to be happy,” Financial Times, 28 August 2010] He asks, “Are fat friends good for us? Is divorce really such a bad thing? Will moving to Los Angeles improve our lives?” He continues:

“Studies in psychology suggest … that most of us are very bad at predicting how we’ll react when faced with many of life’s experiences. Consequently, we end up making choices that are potentially harmful to our emotional wellbeing. According to Harvard psychologist Daniel Gilbert, we tend to overestimate, by a long way, the extent and duration of the emotional impacts of, say, a pay rise, the death of a loved one, or even moving to an area that’s sunny all year round. This is simply because, when we’re trying to imagine how an experience will affect us emotionally, we tend to focus too much of our attention on the most salient features of the experience in question. In our minds, Los Angeles = sunny weather; money = nice cars and luxurious holidays. In reality, however, the many other less salient features that we often fail to consider will have emotional consequences. Los Angeles, for instance, is actually thousands of miles away from our friends and family; we need to work harder in order to earn more. This explains why happiness often eludes us when we blindly follow our imaginations or what conventional wisdom tells us about what makes us happy.”

It’s not just conventional wisdom that is trying to tell us how to be happy. The media plays a role as well. Powdthavee then asks the million dollar question, “Where should we look for happiness?” He continues:

“New research in psychology and economics suggests the answer lies in what we already have – things like friends and family. The secret to being happy is simply to devote more of our time and attention to these happiness-rich and fulfilling experiences. As the US rabbi Hyman Schachtel once famously said: ‘Happiness is not having what you want, but wanting what you have.'”

Based on that philosophy, Powdthavee offers a few conclusions. The first conclusion remains debatable:

“1. Money buys you little happiness. “One of the most infamous findings in happiness research is that money doesn’t buy a lot of happiness – or at least not as much as we think it should. According to the economist Richard Easterlin, part of the reason for this is that we care a great deal more about what other people earn than what we do ourselves. For those whose most basic needs are already met, money buys additional happiness only if it can lead to higher status in society, which is hard when everyone else is also getting richer over time. … Moreover, according to the Princeton University psychologist Daniel Kahneman, the weak relationship between happiness and income can also be explained, in part, by the evidence that richer people tend to spend more time engaging in activities associated with no greater happiness, on average, but with slightly higher tension and stress – such as work, childcare and shopping. By contrast, people with lower incomes tend to spend more time engaging in happiness-rich experiences such as socializing with friends and other passive leisure activities such as resting and watching television. However, when these high- and low-income earners are prompted to think about the impact of income on their happiness, both tend to focus more on the conventional possibilities of money when evaluating its effects. This leads to the conclusion that life must be significantly happier for the rich than for the poor. The truth is quite the opposite: poorer people can – and often do – lead significantly happier lives than the rich.”

A study conducted by the Princeton economist Angus Deaton and psychologist Daniel Kahneman determined that “there is a specific dollar number, or income plateau, after which more money has no measurable effect on day-to-day contentment. The magic income: $75,000 a year.” [“The Perfect Salary for Happiness: $75,000,” by Robert Frank, Wall Street Journal, 7 September 2010]. I’m assuming that the $75,000 figure is for those living in the United States. One would have to convert that figure to purchasing power parity for other countries to see if the conclusions hold true elsewhere. Frank reports:

“As people earn more money, their day-to-day happiness rises. Until you hit $75,000. After that, it is just more stuff, with no gain in happiness. That doesn’t mean wealthy and ultrawealthy are equally happy. More money does boost people’s life assessment, all the way up the income ladder. People who earned $160,000 a year, for instance, reported more overall satisfaction than people earning $120,000, and so on. ‘Giving people more income beyond 75K is not going to do much for their daily mood … but it is going to make them feel they have a better life,’ Mr. Deaton told the Associated Press.”

As Powdthavee notes, however, the magical figure changes depending on location and circumstances. I certainly don’t subscribe to the notion that only people making $75,000 or more can be happy. Powdthavee’s second conclusion is not as controversial.

“2. Friends are worth more than a new Ferrari. “How much money is enough to make us happy? Because the effect of income on our happiness depends largely on how much money our colleagues, neighbors and friends earn, it’s difficult to say. Yet it’s easier to say how much extra money is required, on average, for a socially isolated person to be just as happy as a socially active person – no more, no less. The calculation of prices of various non-marketable goods such as the joy of friendship or marriage, first put forward in the early 1990s by the University of Warwick economist Andrew Oswald, is based on a very simple idea. Imagine that, on average, money makes people happy. Imagine also that people who see their friends every day are significantly happier than those who live in isolation. In principle, then, it’s possible to calculate how much extra income would have to be given to someone to compensate exactly for the lack of social life. In Britain, for example, a pay rise of £1,000 is associated with an increase in happiness of approximately 0.0007 points on a self-reported seven-point happiness scale. Seeing friends more often, on the other hand, is associated with an increase in happiness of approximately 0.161 points. What this implies is that swapping a sociable life for an isolated one requires a pay rise of approximately 0.161/0.0007 – roughly £230,000 a year. That’s a little more than a new, gleaming Ferrari 612 Scaglietti.”

Frankly, Powdthavee’s (or Oswald’s) calculations seem a bit contrived. Nevertheless, I certainly have no argument with the conclusion that friends mean more than possessions. How often does one hear a celebrity who has gone bust talk about finding out who his or her real friends are once the money is gone? One of my favorite quotes has been attributed to both Dinah Maria Mulock Craik and George Eliot. It reads:

“Oh, the comfort, the inexpressible comfort of feeling safe with a person, having neither to weigh thoughts nor measure words, but pouring them all out, just as they are, chaff and grain together, certain that a faithful hand will take and sift them, keep what is worth keeping, and with a breath of kindness blow the rest away.”

That sense of intimacy and safety cannot be purchased for a price. Companionship, I believe, is critical to happiness. Powdthavee’s third conclusion continues his theme of money doesn’t bring happiness.

“3. Winning the lottery won’t make you instantly happy. “One of the most surprising findings in recent research shows that a lottery win of £1,000 or more won’t immediately make you happy. Instead, it takes two years before winners enjoy their money. This is in stark contrast to the effect of earned incomes on happiness: an increase in salary often leads to some immediate improvement (again, not as much as one would think) in a person’s happiness. But why does the joy from a lottery win take two years to arrive? One hypothesis is that, while traditional economic theories typically assume that a pound is a pound is a pound, the reality is that one pound won is not the same as one pound earned. From new research on ‘lagged deservingness’ among lottery winners that I undertook with economists Andrew Oswald and Rainer Winkelmann, earned income is regarded as money that is intrinsically deserved. Lottery income isn’t. The winner doesn’t immediately think that she is fully deserving of the money because winning the lottery creates a form of unwanted cognitive dissonance – the process associated with holding two contradictory ideas in one’s head.”

If you want to talk about cognitive dissonance with relation to the lottery, one should consider who actually participates in the lottery. It’s not the rich and famous. Lotteries are an undeclared tax on the poor. They prey on people who long to strike it rich as a way of getting them out of poverty or debt. Lottery winners aren’t taking from the rich and giving to the poor. They are taking from the poor and giving to the poor. No wonder winning the lottery doesn’t bring instant happiness! Powdthavee’s next conclusion is about unhappiness rather than happiness.

“4. Losing your job makes you unhappy – but less so when others have, too . “Losing your job is one of life’s most miserable experiences – more so than getting a divorce. One reason for this is obvious: unemployment removes a constant stream of income. Even so, the unemployed also report substantially lower levels of happiness relative to those who are employed but have the same income. The psychic cost of unemployment can in part be explained by the social stigma and loss of self-esteem job-loss entails. There is a flipside to this, though. While unemployment lowers well-being for both the unemployed and the employed (perhaps by creating expectations of job loss), its effect on those already unemployed is notably reduced when a lot of other people – colleagues, neighbours, people living in the same region or even in the same household – are also unemployed. The reason is simple, argues the economist Andrew Clark of the Paris School of Economics. Where being unemployed is the norm, the impact on your reputation caused by job loss is lessened. In other words, it feels relatively OK to be unemployed when a lot of others are also unemployed.”

Basically, Powdthavee is saying misery loves company. Being unhappy, however, is being unhappy. That is why reducing high unemployment rates is critical to raise national morale. Today’s high unemployment rate helps explain the angry and uncivil level of U.S. politics. Yep, misery loves company. Powdthavee’s next conclusion appears a bit off the wall.

“5. Fat friends make you happier than thin ones. “New evidence suggests that we care about other people’s weight as much as we do our own. It’s always more desirable to be slim – perhaps because it offers a better chance of finding a person to date or marry, or even faster job promotion. However, when the people we normally compare ourselves with become fatter, the cost of putting on weight for many of us reduces. Put simply, when other people around me become fatter, I don’t have to compete so much with them to stay slim. According to research conducted by economists David G Blanchflower, Andrew Oswald and Bert Van Landeghem, people with weight problems – those with a body mass index (BMI) of 30 or over – are significantly unhappier than people within a healthy weight range (BMI 18.5–25). However, the overweight tend to report higher levels of happiness when other people of the same age and gender are as heavy or heavier than they are. The same also goes for individuals who live in the same household: our own weight doesn’t bother us as much, that is, when our partner is also putting on weight.”

That sounds more to me like being comfortable than it does about being happy (i.e., birds of a feather flock together). Nobody enjoys being criticized or harped upon. The chances of experiencing criticism or concern about weight are undoubtedly going to be reduced when you associate with others who are also looking to avoid those uncomfortable moments. Powdthavee’s sixth conclusion is about marriage — or rather the dissolution of marriage.

“6. Divorce can make you happy. “Those who are divorced tend to report lower levels of happiness than people who are married. While this result is probably unsurprising to many people, such cross-sectional comparisons between two groups of individuals can often lead to severely misleading conclusions – in this case, that divorce makes people unhappy. For one thing, the choice to dissolve a marriage is a rare decision for any individual to take, and one that’s unlikely to have been made entirely on a whim. One could even argue that divorce must make people happy given that one would only go through with it if the benefits of doing so outweighed the costs. This leads to an important question: what happens to people’s happiness in the periods before and after divorce? According to the psychologist Ed Diener, the worst moment for men is the year preceding the divorce; the worst moment for women is two years before the divorce, with their happiness on the verge of bouncing back the year preceding the split. This pattern probably reflects the fact that the majority of divorces are initiated by the wife.”

I think it’s worth repeating Powdthavee’s opening statement that “those who are divorced tend to report lower levels of happiness than people who are married.” Certainly people in destructive or abusive relationships are better off (and happier) out of those relationships; but, for the most part, people in committed relations are happier. This conclusion is really a complementary argument that friends are worth more than a new Ferrari. In happy marriages, couples are usually also best friends. Powdthavee’s final conclusion supports the argument proffered by the Goldsmiths that “happiness and meaning in life appears to have more to do with who we are than where we are.”

“7. Happiness is contagious. “There are many benefits to being happy. Happier people tend to be healthier, live longer and earn more. They also tend to volunteer more, be better at relationships and smile more of what psychologists call ‘Duchenne’ or genuine smiles. Less well understood is why happiness is contagious. According to James Fowler and Nicholas Christakis, authors of the international bestseller Connected, people surrounded by many happy friends, family members and neighbors who are central to their social network become significantly happier in the future. They say we will become 25 per cent happier with our life if a friend who lives within a mile of us becomes significantly happier with his or her life. So, why is happiness contagious? One reason may be that happy people share their good fortune with their friends and family. Another could be that happy people tend to change their behavior for the better by being nicer or less hostile to those close to them. Or it could just be that positive emotions are highly contagious. In short, happiness is not only desirable for personal reasons; its pay-offs can also be of unimaginable value to society.”

I would venture to say that happy people are also optimistic people. I’ve written a number of posts concerning the benefits of optimism that you might like to read if this is a subject of interest for you: Optimism and Pessimism, In Praise of Optimism, and Making Yourself More Valuable at Work. Before concluding this rather lengthy post about optimism, I’d like to refer to two other articles on the subject. The first article asserts that the better people are able to concentrate the happier they are. In other words, daydreaming is probably a symptom of unhappiness (like the character in James Thurber’s short story, “The Secret Life of Walter Mitty.” [“When the Mind Wanders, Happiness Also Strays,” by John Tierney, New York Times, 15 November 2010]. It’s an interesting article and worth reading in its entirety. The second article claims that happiness can be a serious handicap when it comes to getting ahead in life (exactly the opposite of what the Goldsmiths and Powdthavee claimed). [“Being happy is a serious handicap,” by Lucy Kellaway, Financial Times, 7 November 2010]. Kellaway writes:

“There is a teenage boy I know who worries me quite a lot. He was born to a good family with plenty of money. He is extroverted and optimistic; people appear to like him. He’s relatively easy on the eye and reasonably bright. His health is good and he can kick, hit and catch balls of various shapes and sizes. He does not smoke, or take drugs, or do any more binge drinking than the next person. The problem with this boy is that he has never in his entire life made an effort at anything. He has spent his first 16 years having a jolly nice time on the path of least resistance and even though he has often been told that the path of greater resistance is the one that leads to success and fulfilment, he takes no notice. Why would anyone, he asks, slog their guts out to get an A, when for a tiny fraction of the effort they can get a B, which is surely the next best thing? This teenager suffers from a syndrome that is increasingly common among boys who have been blessed by fortune. I have named it EHS, or Excess Happiness Syndrome. … So far this syndrome has been ignored by experts who study performance. Yet it’s so obvious: being truly happy is a serious handicap. If life is thoroughly agreeable as it is, why should anyone lift a finger to change it?”

Pardon me if I think that Kellaway has mistaken laziness for happiness. Her reasons for this mistaken diagnosis are understandable. She read a blog about what motivated some entrepreneurs to set out on their own and misery was one of the motivators. She continues:

“The Harvard academic Rosabeth Moss Kanter touched on this in a blog post entitled: Mark Zuckerberg and Misery as Motivation. She argued that what gets entrepreneurs going are the painful flaws in their characters and in their circumstances. Mr Zuckerberg, at least according to the film The Social Network, set up Facebook because he didn’t have any friends. Even though the man himself says this is twaddle, I bet that if he had been the most popular guy at Harvard he would [not have had] the idea of setting up a website. Equally, Evan Williams, who has just moved aside as chief executive of Twitter, is supposed to be shy and slow to decide things, which may have drawn him to a business where communication is easy and instant. There are lots of other examples among entrepreneurs. Alan Sugar would surely not have been boiling beetroot or flogging firewood as a school boy if there had been any money at home. Richard Branson might not have been so keen to prove himself had he not been dyslexic and seen as a dunderhead. It is not only true of entrepreneurs. The same applies to success in the corporate world, or success at anything at all.”

Happiness is a relative thing and only fools are happy all of the time. It would be a sad world indeed if only the miserable were motivated. Kellaway continues:

“This theory – that it is our unhappiness that drives us on – holds up splendidly in journalism. If I think of colleagues who are not thriving, the problem is more often a shortage of neuroses than a shortage of talent. All good journalists must ardently cling to that most destabilising of truths: you are only as good as your last story. For columnists, even greater character flaws are required: to be any good you must have an insatiable appetite for approval that can only come from a secret fear that you are no damn good. So if it is pain and misery that count, we need to rethink the sort of jobs people should do, the sort of people companies should hire. To find the right career we should ignore the standard advice – do what you love – and identify the character flaw or source of misery. Do what scratches the itch, is more like it.”

I’ll let you be the judge as to whether happiness helps or hinders one from moving forward and excelling in life. If Kellaway is correct, then maybe the reason that money doesn’t make one happy is because the people that make a lot of it start out as miserable individuals — it’s in their nature. While I don’t ascribe to the “fat, dumb, and happy” philosophy, I don’t necessarily believe that overachievers must be miserable either. H. Jackson Browne once wrote, “People take different roads seeking fulfillment and happiness. Just because they’re not on your road doesn’t mean they’ve gotten lost.”