Rising wealth in China fails to buy more happiness Vincent Thian / AP A worker prepares to start business for the day at a traditional food stall in Beijing. Over the past two decades, incomes have gone up fourfold in the world's most populous country. Sometimes more money just buys more unhappiness. Take China, for example. Everyone assumed that people would get happier as their wallets got fatter. But a new study shows that the opposite occurred, at least for those at the lower end of the income spectrum. Despite record economic growth over the past two decades - resulting in more than fourfold increase in income and spending - Chinese people overall have become less satisfied with life, according to the study published in the Proceedings of the National Academy of Sciences. "Incomes really did go up - even among the poorest segment," says the study's lead author, Richard A. Easterlin, university professor and professor of economics at the University of Southern California. The staggering thing is that despite that, overall satisfaction failed to go up. Not only did satisfaction fail to go up, it fell like a rock in the early 1990s. Satisfaction slowly climbed back up after that but never to the point where it was at the beginning of China's economic transformation. Easterlin and his colleagues looked at two decades of surveys that included questions about life satisfaction. In 1990, those surveys showed that a large majority of the Chinese people, across all age, education and income levels, reported high levels of life satisfaction. A full 65 percent of those in the poorest income bracket reported high satisfaction as compared to 68 percent of the most wealthy. By 2010, just 42 percent of Chinese in the lowest income bracket reported high satisfaction, compared with 71 percent of the most wealthy. "Although a precise comparison over the full study period is not possible, there appears to be no increase and perhaps some overall decline in life satisfaction," the study says. While many people believe economic growth leads to rising happiness, an entire field of economics has shown that happiness and wealth are not always closely correlated. Part of the explanation for the unhappiness in China may lie in big societal changes that came along with the country's amazing economic boom. "Here we have people who were basically secure about their jobs, their income and their retirement, and that all goes by the board," Eaterlin said. So even though incomes got better, overall feelings of anxiety became much more severe and outweighed the material improvements. Beyond this, health care was no longer a right. As the system became privatized, fewer could afford doctors" bills. So along with lowered satisfaction, people were reporting poorer health. Easterlin sees this as proof that the road to happiness requires more than just bigger paychecks - especially if everyone is getting a bump in pay. China might make its people happier if the country repaired some of its damaged safety nets, he argues. But even with that, there might still be plenty of dissatisfaction. The problem may simply be that people are more concerned about money now and more focused on "keep up with the Jaos," Easterlin says. Breaking down the economic data out of China and discussing which emerging markets investors should be after, with Geoffrey Dennis, Citigroup and Andrew Kanaly, Kanaly Trust Company CEO.