Can’t Buy Me Love: Therapy Trumps Cash?

In a world where “More Money” tends to be the default solution to just about every problem, a study at the University of Manchester in England generated some surprising results.

Chris Boyce of the University of Warwick and Alex Wood of the University of Manchester compared large data sets where 1000s of people had reported on their well-being. They then looked at how well-being changed due to therapy compared to getting sudden increases in income, such as through lottery wins or pay rises. They found that a 4 month course of psychological therapy had a large effect on well-being. They then showed that the increase in well-being from an £800 course of therapy was so large that it would take a pay rise of over £25,000 to achieve an equivalent increase in well-being. The research therefore demonstrates that psychological therapy could be 32 times more cost effective at making you happy than simply obtaining more money.

Source: http://www.sciencedaily.com/releases/2009/11/091120084613.htm

Also see video interview

Not to take anything away from money and its importance, of course. I think an interesting variation of this kind of study could be done taking into account what economists call marginal utility: an unexpected $1000 probably won’t mean nearly as much to Bill Gates as it would to somebody who’s been living on the street.

But the study has some important implications for career planning.