Money, Money, Money ... Money!

Financially richer people tend to be happier than poorer people, according to sociological researcher Glenn Firebaugh, Pennsylvania State University, and graduate student Laura Tach, Harvard University.

They researched whether the income effect on happiness results largely from the things money can buy (absolute income effect) or from comparing one’s income to the income of others (relative income effect).

Firebaugh argues that a person's reported level of happiness depends on how his or her income compares to others in the same age group. This may result in a self-indulgent treadmill, because incomes in the United States rise over most of the adult lifespan.

While income is important in determining happiness, Firebaugh’s data found that physical health was the best single predictor of happiness, followed by income, education, and marital status.