Nobody really knows who first coined the phrase 'money can't buy happiness'. But while those of us who don't have a big pile of cash may mock the sentiment, a study by the London School of Economics suggests it could well be true.

According to the Origins of Happiness report, eliminating mental health issues such as depression and anxiety would increase happiness by 20%, whereas eliminating poverty would increase happiness by only 5%. In other words, tackling mental health problems would be 4 times more effective at increasing happiness than reducing poverty. And the best part, say the researchers behind the report is that reducing mental illness doesn't have to cost a penny.

Led by top economist Lord Richard Layard, the team of experts at the London School of Economics' Centre for Economic Performance investigated the best ways of achieving happiness, reducing misery and promoting wellbeing. Their report made several interesting findings about the key principles of people's life satisfaction, including the following:

  • Income inequality explains just 1% of the variation in happiness in the community, while mental health differences explain more than 4%
  • Education has a very small effect on life satisfaction, compared with, for example, having a partner. Having a partner is also as good for you as being made unemployed is bad for you
  • When people evaluate their income or education, they generally measure it against the locally prevailing norm. This may explain why overall increases in income and education have had little effect on the overall happiness of the population (in Australia, Britain, Germany and the United States, average happiness has failed to rise since records began, despite massive increases in living standards)
  • The strongest factor predicting a happy adult life is not children's qualifications but their emotional health. There is also evidence that schools have a big impact on children's emotional health, and which school a child goes to will affect their emotional wellbeing as much as it affects their exam performance

How can I be happy?

"The evidence shows that the things that matter most for our happiness and for our misery are our social relationships and our mental and physical health," says Layard.

Indeed, in his 2015 book Thrive: The Power of Psychological Therapy, co-written with David M Clark, Layard talks about how tackling mental health problems in society can actually save governments money as the economic benefits would be greater than the cost of the treatments:

Mental pain is as real as physical pain. It is experienced in the same areas of the brain as physical pain and is often more disabling. Yet these two types of pain are not treated equally. While nearly everyone who is physically ill gets treatment, two in three of those who are mentally ill do not. If your bone is broken you are treated automatically, but if your spirit is broken you are not.

Treating mental health problems produces extraordinary savings – fewer people on welfare benefits and fewer people being treated for physical illnesses made worse by mental illness. So on any reasonable estimates the treatments pay for themselves. They cost society nothing. And yet they are provided to under a third of those who need them.

In Britain today one in six of all adults suffers from depression or a crippling anxiety disorder. Roughly a third of families include someone who is mentally ill. Mental illness is not only common, but it can be truly disabling through its impact on people's ability to care for themselves, to function socially, to get around and to avoid physical and mental pain. In that sense, depression is on average 50% more disabling than angina, asthma, arthritis or diabetes.

Layard, R., Clark, DM. (2015) Thrive: The Power of Psychological Therapy. Penguin Books

Make happiness a priority

Layard's Origins of Happiness report aims to revolutionise how governments think about human priorities, and to encourage them to prioritise wellbeing as a measure of a country's success, rather than economic factors. After all, as the researchers point out, in European elections since 1970, people's life satisfaction has predicted whether a government gets re-elected far more than economic growth, unemployment or inflation.

This may be particularly good news for the Norwegian government, as Norway recently ranked as the happiest country in the World Happiness Report 2017. Produced by the Sustainable Development Solutions Network, the report looks at happiness levels in 156 countries. This year, Norway took the top spot, followed by Denmark, Iceland, Finland, The Netherlands, Canada, New Zealand, Australia and Sweden.

How CABA can help

Here at CABA we have lots of advice and support to help boost your mental wellbeing and achieve increased happiness. Download our guide How to improve and maintain your mental wellbeing; or if you want to feel happier at work, take a look at our article Ways to Boost Your Workplace Happiness. You may also want to join us on our free course Authentic happiness: the theory and practice of wellbeing.

And no matter what stage of life you're at, our free wellbeing zone and app can make taking care of your wellbeing quick, easy and flexible. We're also here whenever you need help with emotional support. Our trained counsellors are available over the phone and online 24/7. Call us on 0800 107 6163 or chat to one of our advisors online, any day or time.