The Philosophical Approach

However, when most people are asked a variation of "What makes you happy?" money typically doesn't rate very high. Generally speaking, respondents to such surveys most often say things like cultivating high-quality relationships with friends and family, making a positive contribution to the world, and "having time for themselves, to restore and rejuvenate," according toStewart Friedman, a management professor at Wharton.

Friedman, whose research focuses on the intersection of organizational behavior, work and life integration, teaches a class on leadership that grew out of a two-year assignment at Ford. In the class, he guides students through exercises to identify their core values and recognize what matters most to them, and then helps them figure out ways to manage their work, family and community commitments to better align their lives with their values. "The outcomes people pursue have a lot to do with well-being and happiness," he says. "They want to contribute to making the world a better place, a safer place. They recognize the importance of meaning."

Then there is the matter of how individuals define happiness, according to Diener, who is also a senior scientist with Gallup. This summer, Gallup conducted a worldwide survey of more than 136,000 people in 132 countries that included questions about happiness and income. The survey asked respondents questions about their income and standard of living, whether their basic needs for food and housing were met, what kinds of conveniences they owned and whether they felt their psychological needs were satisfied. The survey included a global life evaluation, which asked respondents to grade their lives on a scale that ranged from zero (worst possible life) to 10 (best possible life). The poll also asked respondents whether they felt respected, whether they had family and friends they could count on in a pinch, and how free they felt to choose their daily activities.

The results show that while life satisfaction usually rises with income, positive day-to-day feelings don't necessarily follow. "Looking at life satisfaction -- when you stand back and make a judgment about your life -- you might say 'As a whole it's pretty good: I'm married, I have a job, I am in good health.' You see a pretty strong correlation around the world between personal and national income and happiness," Diener says. "On the other hand, when you look at life enjoyment [or] experienced moment-to-moment happiness -- Are you enjoying your job? Are you learning new things? Are you spending time with friends? -- there is only a small correlation with money. Instead, these are much more strongly associated with other factors, such as feeling respected, having autonomy and social support, and working at a fulfilling job."

According to Diener, one of the impediments to happiness is the "rising aspiration problem," also known as plain old materialism. "Aspirations rise so quickly that people become disappointed with the amount of money they make because they always want more of it," he notes. "Every day we see movies and TV shows about people who make a lot of money and are buying $20 million yachts. This is pervasive all over the world; our survey tells us that more people in developing countries own television sets than have running water in their homes. The media has driven people's aspirations quickly."

There's also the issue of how you got the money, how you spend it and how you spend your time, he points out. "If you got the money because you're an attorney at a big firm, working 80 or more hours a week, then you're probably tired. You work long hours and you commute, and there isn't a lot of time in your life for anything other than work. And maybe you're spending your money on your nanny, your housekeeper and all the other things you need to keep your life afloat, not things that really make you happy."