Wednesday, September 01, 2004

Money can buy happiness. Here's how.

Driving to work this past week, I've had an insight into the key to happiness. We have moved house, and it now takes twice as long as it did to get to work each morning. No big deal, do I hear you cry?

Well, it seems like a big deal to me, and the more I ask, the more I discover that to researchers in the field of happiness, it is one of the very few things that is.

Their problem is that happiness is slippery. Money or changed circumstances can buy more of it, but the effect usually doesn't last long.

It needs to be said first that happiness itself is easy to measure. The researchers ask people whether they are (a) very happy; (b) fairly happy; or (c) not happy.

The results line up with other measures of happiness.

The people who say they are happy are those more likely to call up friends, less likely to commit suicide. And their brains light up in the same sort of pattern when they are put under a scanner...

The researchers find that people who win the lottery do indeed feel happier to start with, but after a while they feel a little better than they did before. Conversely, people mutilated in accidents feel devastated at first, but after a year or so often feel as happy as always.

As Ethan Hawke puts it in the new movie Before Sunset: "If they were basically optimistic and jovial, now they're optimistic and jovial in a wheelchair. If they were petty and miserable, now they're petty and miserable with a new Cadillac, a house and a boat."

Each of us seems to have our own built-in happiness equilibrium, resistant to attempts to upset it. The Holy Grail in economic research (as with much pharmacological research) is to work out how to use money to break free of it.

Robert Frank, a Cornell University economist, believes that as a matter of logic it must be possible. He says money can buy many truly useful things. Surely, some of them must be able to make a permanent impression on the way we feel.

In the journal of the American Academy of Arts and Science, D├Ždalus, he asks: "Would we really not be any happier if, say, the environment were a little cleaner, or if we could take a little more time off, or even just eliminate a few of the hassles of everyday life?"

He says the problem is that we choose to spend money on things that don't help. In the US house sizes are getting bigger and bigger. In Australia the typical new house has doubled in size over the past 50 years. It's now more than 250 square metres; about 100 square metres of indoor space per person. And many of the new houses being built in Sydney's south-west are bigger still.

Is all of the extra space making us happier? The evidence suggests that more space doesn't make us happier for long, in the same way as better views from our office windows don't work their magic for long. We get used to them.

But there are things that we could spend money on instead that might make a good deal of difference to the way we feel about life.

Robert Frank asks us to perform this thought experiment. Imagine, he says, two societies, equally wealthy, but with different patterns of spending. In society A the houses take up 4000 square feet and the journey to work takes one hour each day in heavy traffic. In society B the houses are 3000 square feet, and the journey to work takes only 15 minutes. He asks in which society we would prefer to live.

If we were choosing on the basis of likely happiness, the answer would have to be society B. All of the evidence suggests that the stress of driving through traffic is something we never completely adapt to. It wears us down day after day, and it shortens our lives. Escaping it stands a very good chance of making us happier.

Frank performs other thought experiments. Which society would you rather live in? One in which everyone lived in a house of 4000 square feet and had one week's holiday a year, or one in which the houses were 3000 square feet and people got four weeks off each year?

In each case he is offering a choice between "conspicuous consumption" and what he calls "inconspicuous consumption". Frank's notion of inconspicuous consumption usually involves time: arranging things so that you have more time to do the things you like, by spending less time doing the things that you don't.

It's a lesson that would come as no surprise to my teenage daughter. She's grown up playing The Sims, an incredibly complex computer game in which you manipulate the decisions of artificially intelligent beings in simulated societies. It's a sort of electronic economic laboratory.

One of the unexpected discoveries made by fans of The Sims is that the best way to make the characters happy is to have them free up their time, rather than buy them luxuries. In the words of the game's creator Will Wright, time is the resource, happiness is the score.

Perhaps that's just a result of the way that game is set up. The characters in the computer game don't seem particularly susceptible to envy. But if we were less susceptible to envy as well, we probably would not be as keen as we are on large houses. We would look for smaller houses closer in; saving ourselves stress, giving ourselves the gift of time, and quite possibly genuinely buying happiness.

The boom in inner-city living over the past few years suggests it's a realisation that more and more are waking up to. The next time our family moves, perhaps we should, too.