disability, wealth & well-being

a new study reveals circumstances when money does buy happiness. it turns out that although psychologists claim that wealth above a minimal threshold has no impact on well-being, it certainly does after one suffers tragedy, such as illness or disability:

The analysis showed that those whose financial assets had been above the median before they were disabled suffered a much smaller drop in self-reported well-being than those who had been below the median. A second analysis confirmed that there was a relationship between a person's net worth and the drop in their well-being after disability.

of course those with more cash reserves are better equipped to handle disaster. although these reserves themselves, during good times, do not improve well-being, they certainly will cushion the fall during crisis. earlier i wrote on money's tangential effects on well-being during natural disaster:

the market has the best record of meeting the most essential levels of maslow's hierarchy of needs, even during times of crisis. for market pessimists, we can think of it as an insurance system. although we may pay in a certain percentage of happiness for materialism due to markets (a debatable premise), we gain when disaster strikes. and the gain may make it worth it.

wealth, then, becomes much more significant than psychologists claim. as wealth promotes well-being during crisis, and this well-being in turn facilitates not only healing, but accumulation of more wealth, the balance in your bank account is no laughing matter.

Labels: economics, well being