As we navigate through different stages of life, we often find ourselves following the relentless pursuit of happiness. In this intricate society, it’s as if everyone is racing towards an elusive destination without truly understanding the purpose of the journey. We witness countless individuals, scurrying through labyrinthine shopping malls, their eyes fixated on the allure of luxury cars or extravagant bottles of wine. At first glance, these symbols of affluence appear to open windows to a world brimming with joy, their appeal irresistibly intoxicating. Yet, as the initial rush of dopamine fades, we are left to grapple with a realization – the pursuit of happiness is not a straightforward path. So, what truly constitutes genuine happiness, and how can we gauge its presence in our lives?

The relationship between money and happiness

The concept of utilizing income or other objective indicators, such as employment, education levels, or health, emerges as a common response when people are asked about how to measure happiness. Psychologist Daniel Kahneman’s research challenges the notion that material wealth is the sole determinant of life satisfaction. Kahneman and his colleague Deaton carried out an analysis of 450,000 responses from a daily survey that was sent out to 1,000 US residents. He discovered that while an increase in income does lead to an initial rise in happiness, the effect plateaus as income continues to rise. Kahneman’s findings indicate that beyond a certain point, at approximately $75,000, additional income has diminishing returns in terms of happiness. This phenomenon, known as the “income-happiness paradox,” contradicts the traditional economic theory of diminishing marginal utility, which is the idea that additional income theoretically should bring about an equivalent increase in the level of happiness in an individual. 

Furthermore, Kahneman and Deaton also found that overall, other factors such as food, shelter, and healthcare, are crucial for happiness, but once these needs are met, the correlation between income and happiness weakens. This idea aligns with Abraham Maslow’s need hierarchy theory, where he reflected universal needs by classifying them into different levels, and as the previous level is satisfied, motivation will arise for the satisfaction of the next level (Maslow, 1943). In this case, once the basic physiological needs are satisfied, the next levels of needs such as belonging, love and esteem cannot be simply obtained using monetary means, therefore money would not satisfy. 

Moreover, another crucial concept in Kahneman’s research is the impact of income inequality on happiness. His studies demonstrated that individuals’ happiness is not solely determined by their income level but also by their relative income compared to others or how evenly distributed the income is within a population. Greater income inequality within a society was found to be associated with lower levels of happiness across all income levels, suggesting that the social context in which individuals live also has a significant impact on their happiness (Kahnemann and Deaton, 2010).

However, Harvard researcher Matthew Killingsworth carried out similar research by collecting real-time data on individuals’ experienced well-being and income levels and yielding an opposing conclusion to what Kahnemann had. Killingsworth’s results suggested that even if annual income exceeded $75,000, emotional well-being continues to grow, challenging the previously proposed “income-happiness paradox” (Killingsworth, 2020). To reconcile these conflicting outcomes, Killingsworth and Kahnemann conducted a joint reanalysis of this issue. They concluded that the relationship between happiness and income is not a single linear connection but is also influenced by an individual’s emotional state. The flattening pattern (income-happiness paradox) is applicable primarily to the least happy group of people, and among individuals who already exhibit higher levels of happiness, there is a consistent and gradual increase in happiness as income increases, this positive relationship intensifies even more prominently within the group reporting the highest levels of happiness (Killingsworth and Kahnemann, 2022). 

Money does play a role in contributing to happiness, but its influence is not universal in all circumstances. So why do many of us find ourselves moving further away from happiness in the pursuit of wealth?

An intriguing thought experiment known as “the “Minimum Income Game” was proposed by philosopher John Rawls in his book “A Theory of Justice” in 1971, which sheds light on this question. Participants in this experiment were asked to individually assess the minimum amount of income they believe is necessary to live a decent life without any future income. The participant who reports the least amount among the group is awarded the money, while the others have nothing. The interesting aspect is that the two goals are contradictory—while we desire more money, we also want to report the least amount to win. This scenario reflects a similar dynamic in our daily lives. A National Income Report released by Tencent shows that even in Shanghai, the highest-income city in China, only 35% of the people earn more than ¥10,000 (approximately $1300) per month, yet young people spend around ¥90,000 on luxury products. The underlying cause of this unequal distribution is that the capacity for consumption has not kept pace with the inflated desire to fulfil oneself and attain the so-called “happiness.”

Japanese philosopher Ichiro Kishimi further delves into the concept of happiness in his book “Sometimes Really Desperate.” He posits that the pursuit of material possessions, such as luxury cars and extravagant houses, is often perceived as a pathway to happiness. However, Kishimi argues that these external factors are not happiness in themselves; rather, they are means to achieve happiness. He suggests that happiness can be likened to the fleeting effects of intoxication, where the temporary elation eventually fades away. Merely experiencing happiness in the presence of others, but feeling a sense of loneliness upon returning to solitude, indicates that these factors only bring a superficial sense of happiness rather than genuine happiness (Kishimi, 2023).

These ideas prompted me to contemplate the true meaning of happiness. To me, true happiness stems from a sense of self-worth and identity, as well as a sense of contribution that brings joy to others. In other words, we do not need to exert ourselves solely to accumulate wealth as a measure of obtaining happiness. Our presence and the memories we create, which bring happiness to our friends and family, would hold true significance in experiencing genuine happiness.

Scientific measures of happiness

From a scientific perspective, if money itself cannot serve as an indicator of happiness, how else can we measure it? One alternative approach is to employ subjective indicators, which often provide a more accurate assessment by considering multiple factors and avoiding generalizations. Researchers have attempted to incorporate subjective indicators, such as self-esteem and satisfaction levels, into surveys aimed at assessing individuals’ happiness. Various happiness scales are available online and elsewhere, for example, the Oxford Happiness Inventory (OHI). These scales feature a range of questions, some more detailed than others, but they generally evaluate interpersonal harmony, work achievements, life experiences, and health status, among other factors.

Alternatively, another measure we could possibly apply involves conducting a detailed analysis of different behavioural expressions of people. Ekman and Friesen introduced the Facial Action Coding System (FACS), which is a technique to identify subtle facial movements by categorising various facial muscle actions which collectively, represent a range of expressions (Ekman and Friesen, 1978). While the primary focus of their research is on facial movement measurement in general, we can also take the opportunity of FACS and utilize it as a means to measure happiness indirectly. Happiness is typically associated with specific facial expressions, such as the Duchenne smile, which involves the activation of specific facial muscles. Therefore, by applying FACS to the study of happiness, researchers can assess and quantify the presence and intensity of various action units (AU) associated with happiness. For example, the activation of AU6 (cheek raiser) and AU12 (lip corner puller) is indicative of a genuine smile, potentially suggesting the experience of genuine happiness. Researchers can then code and analyze these specific action units using FACS to determine the degree of happiness expressed by an individual.

Aside from measuring happiness from a behavioural point of view, we could potentially try to reflect happiness through physiological indicators by exploring the relationship between brain activity and emotional experiences. Analyzing neuroanatomy or employing brain scanning methods can reveal which brain regions are activated during experiences of happiness. For instance, psychologist Richard Davidson discusses the neural correlates of positive emotions and happiness in his research, suggesting regions like the precuneus, the right prefrontal cortex and the amygdala are involved in the emotion of happiness (Davidson and Irwin, 1999).


The measurement of happiness extends beyond the confines of money alone. While money can play a role in our pursuit of happiness, it is not the ultimate source of well-being. Many individuals in today’s society mistakenly believe that accumulating wealth is synonymous with attaining happiness, often neglecting the true essence of happiness. This fixation on material possessions blinds us to the deeper and more meaningful aspects of life. By exclusively associating happiness with financial gain, we inadvertently restrict ourselves and ignore the abundant happiness that cannot be quantified by monetary means.

The scientific measurement of happiness encompasses a range of factors that extend beyond material wealth. It involves subjective indicators, such as self-esteem, satisfaction levels, facial expression analysis through FACS, and exploring brain activity. These multidimensional approaches provide us with a more comprehensive understanding of happiness and offer alternatives to the limited perspective of money. By broadening our perspective and recognizing the limitations of using money as the sole measure of happiness, we can embrace the joys of life that lie beyond material wealth and cultivate a more fulfilling and meaningful existence.


Davidson, R. J., & Irwin, W. (1999). The functional neuroanatomy of emotion and affective style. Trends in Cognitive Sciences, 3(1), 11-21.

Ekman, P., & Friesen, W. V. (1978). Facial Action Coding System: A Technique for the Measurement of Facial Movement. Consulting Psychologists Press.

Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences of the United States of America, 107(38), 16489–16493.

Killingsworth, M. (2020) Experienced well-being rises with income, even above $75,000 per year. PNAS. 

Killingsworth, M., & Kahneman, D. (2022). Income and emotional well-being: A conflict resolved. PNAS. 

Kishimi, I. (2023). Sometimes Really Desperate

Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50(4), 370–396.

Lijie (Jeremy) Lu

Chair of Theoretical Psychology Society


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