A recent study published in the journal Applied Research in Quality of Life argues that while income remains important, the way people spend their money often has a greater influence on long-term wellbeing than how much they earn.
The study, published in 2026 by researcher Alessandro Bortolotti, reviewed 25 years of international research examining the relationship between income, consumption, and subjective wellbeing. Rather than conducting a new survey, Bortolotti systematically analysed 25 high-quality academic studies published between 2000 and 2025 to understand why rising incomes do not always lead to greater happiness.
The research was conducted using the PRISMA systematic review methodology, a structured approach commonly used to evaluate and synthesise existing evidence. Bortolotti began by screening 173 academic studies before narrowing the analysis to 25 studies that met strict quality and relevance criteria.
The selected studies covered a range of countries, populations, and research methods, allowing for a broad assessment of how income and spending affect wellbeing across different contexts.One of the central findings was that consumption often predicts happiness better than income itself.
In other words, what people do with their money may matter more than the amount appearing on their payslip.The review found that spending on experiences, relationships, and activities aligned with personal values tends to generate more lasting wellbeing than spending on material possessions.
By contrast, highly materialistic consumption patterns were consistently associated with lower levels of life satisfaction.The study also highlighted two psychological forces that frequently undermine the happiness people expect to gain from higher earnings.
The first is hedonic adaptation. As income rises and living standards improve, people quickly become accustomed to their new circumstances. What once felt like a luxury gradually becomes normal, reducing the emotional benefit over time.The second is social comparison.
Individuals often judge their financial position relative to those around them rather than according to their own objective standard of living. As a result, increases in income can fail to improve happiness if people continue comparing themselves to wealthier peers.Importantly, the review does not suggest that money is irrelevant.
Numerous studies included in the analysis found a positive relationship between income and wellbeing, particularly at lower income levels where additional earnings help meet essential needs and reduce financial stress.
However, the evidence indicates that beyond a certain point, the relationship becomes increasingly complex.For South Africans, these findings arrive at an interesting moment.South Africa continues to face high living costs, elevated household debt levels, and persistent economic uncertainty.
In such an environment, financial security remains a critical component of wellbeing. Yet the research suggests that the pursuit of higher income alone may not deliver the improvements in quality of life many people expect.
This is particularly relevant for middle- and higher-income households. As earnings increase, there is often pressure to upgrade homes, vehicles, lifestyles, and social status. While these purchases can provide temporary satisfaction, the international evidence suggests they may not generate the same long-term wellbeing benefits as spending that strengthens relationships, creates meaningful experiences, or supports personal growth.
The findings may also help explain why economic growth and rising consumer spending do not always translate into equally large improvements in reported happiness at a societal level.
According to the review, wellbeing is influenced not only by financial resources but also by how those resources interact with personal values, social relationships, and cultural expectations.For policymakers, businesses, and individuals alike, the message is relatively simple. Financial success remains important, but it is not the sole determinant of a fulfilling life.
The quality of spending decisions appears to matter just as much, and in some cases, even more.
As South Africans continue navigating a challenging economic landscape, the study offers a useful reminder that wealth and wellbeing are related, but they are not the same thing.
Earning more money can create opportunities for a better life. Whether those opportunities translate into greater happiness depends largely on how they are used.
Source Information
Study Title: Living Well or Spending More? A 25-Year Review of Income, Consumption, and Subjective Well-Being
Author: Alessandro Bortolotti
Journal: Applied Research in Quality of Life
Year: 2026
