All right. Money can’t buy happiness. But who in his right mind would refuse a winning lottery ticket? That would be rejecting happiness handed to us on a plate, wouldn’t it?

Let’s see. If you lived in a “highly indebted poor country” (HIPC), each additional euro earned would significantly boost your individual well-being. Most probably, however, you wouldn’t be reading this. You wouldn’t know how, nor would you have access to the internet. As for those people who have reached an “acceptable” income level, surprisingly, they get less bang for each additional buck earned. That’s due to what economists call the principle of decreasing marginal utility. Although they tend to argue a lot about where to establish the threshold, it certainly is much lower than most of us imagine: somewhere between US$5,000 and $10,000 a year per head.

Welshman Luke Pittard won €1.6 million in the National Lottery. He then got married and went off to live in the Canary Islands with his wife. But he missed his work-mates so much that, in a little over a year, he went back to his post in the local McDonald’s franchise to earn €7.5 an hour.

How much more do you think you need in order to be reasonably happy? Regardless of how big a raise you might give yourself — you don’t happen to be a politician, do you? — I’d wager that not even then would you reach your objective. That’s because life satisfaction is relative to expectations. The happiness you previously imagined quickly turns into a disappointment in due course. Remember how happy you were with the first computer games Santa brought you — Tetris, Pacman or Super Mario? And what happened when the next super-enhanced edition arrived and you were left with the old one? Well, that’s exactly what happens.

Besides, it is not just a matter of comparing previous expectations with future realities; it also matters with whom you compare yourself. Cynics say that envy is the worst vice among Spaniards, but I don’t think those of us who live in the land of the siesta and fiesta have a monopoly on the green-eyed monster. Your boss may decide to give you a €5,000 bonus for record sales of umbrellas and raincoats during the recent Easter break. But if everyone else in the store were to receive the same amount, you would not advance much in the happiness rankings, despite the extra bills in your wallet. You would stay in the same place.

Of course money is important, but not as much as we are wont to think. Happiness depends — to an extent larger than we often concede — on what we do with that money. Which is better: to buy a big house in the suburbs or a normal flat in the city center? It so happens that we soon grow accustomed to the big house, to the point where we hardly even notice the benefits. As for the stress that comes with commuting through dense traffic and the lack of time for friends and sports, they are different issues altogether. Better to spend money on those satisfactions to which we never get used.

Neither should we take for granted that everyone knows best how to spend money to make himself happy. Have you noticed the sea of satellite dishes even in the most sordid of slums? They may not have running water, but they certainly don’t miss an episode of “Desperate Housewives”. Happiness is also, and fundamentally, a matter of education.

And what shall we make of work (or unemployment) and inflation? Do they have an equal effect on happiness? Are they like the clutch and accelerator pedals which, if pressed just to the right point, keep the car from stalling? Economic orthodoxy would say yes, but psychology and, more importantly, experience tell us otherwise. We value being able to work, to the extent that it matters more to us than the money or the position. On the other hand, not being able to carry out productive work of any sort causes us much distress. If you don’t believe this, ask the Welshman Luke Pittard. In July, 2006, he won €1.6 million in the National Lottery. He then got married and went off to live in the Canary Islands with his wife. But he missed his work-mates immensely and was beside himself with boredom. That’s why, in a little over a year, he went back to his post in the local McDonald’s franchise to earn €7.5 an hour.

We also seem to be more sensitive to the loss of purchasing power due to inflation than to the perceived benefits of an increase in wages. Economists would tell us that there’s no reason for behaving that way, but that’s just how we are. Call it human nature that doesn’t adjust so snugly to what economists deem rational. In the same way, when the economy goes chugging along we tend to attribute it to our own merits, and when it begins to lose steam we blame it on the government.

Talking of the government, how does it affect our happiness? That’s a highly complicated matter. Nonetheless, a regime that promotes citizen participation and, to the measure possible, facilitates self-rule seems beneficial. There are many ways of doing this: free, fair and regular multi-party elections, referenda and other popular consultations, federalism, and so forth.

The list of factors that condition human happiness seems endless: health, family life, religious practice, age, values… It would also be interesting to know whether happiness is more strongly associated with smaller groups, such as the family, the firm or a local community. But aren’t we missing something important? So far, we’ve only dealt with economic, psychological and political factors. How about ethics and the virtues? That will have to be another story.

Dr Alejo Sison holds the Rafael Escolá Chair of Professional Ethics at the University of Navarra in Spain.

Alejo José G. Sison teaches ethics at the University of Navarre and Georgetown. His research focuses on issues at the juncture of ethics, economics and politics from the perspective of the virtues and...