The Price of Happiness

We've all heard the saying that money can't buy happiness, but new research from the University of Warwick and Watson Wyatt suggests that a certain amount of money actually can increase our feelings of happiness.

Many lottery players will claim to have instinctively known this for a long time, but what they may not have realised is that you don't need to become a millionaire to feel a difference. Whilst small sums of tens or hundreds of pounds obviously do little to improve our happiness quotient, you certainly don't need to win a jackpot.

The research of Professor Andrew Oswald from the University of Warwick and Dr Jonathan Gardner, which will be published in the Journal of Health Economics, shows that medium-sized lottery wins (which covers the range of £1000 to £120,000) can have a long term sustained impact on the overall happiness experience by the winners.

The research goes on to say that after two years, medium-sized lottery winners had an average mental wellbeing GHQ score 1.4 points better than previously. In layman's terms, this means that two years after their win, these medium-prize winners were an impressive 10% happier than those of us who haven't won anything or who have only won very modest prizes.

The findings are the fruit of a fourteen year longitudinal study using the British Household Panel Survey (BHPS), which tracks 5,000 British households.

One might be forgiven for thinking that any increase in happiness takes place as soon as the win occurs, but the new research shows that this is not the case. Instead, it takes some time for the happiness-increasing effects of a medium-sized win to "show through" into the daily lives of winners.

Commenting on this observation, Economist Professor Andrew Oswald from the University of Warwick said: "This delay could be due the short term disruptive effect on one's life of actually winning, but a more plausible explanation of the delay is that initially many windfall lottery funds are saved and spent later."

So, the next time you play the lottery, don't think that you necessarily need to win the jackpot to become happier. We can all be 10% happier just by winning a medium-sized prize - and that's a scientific fact!

28 September 2006