Economics Study: Happiness Doesn't Buy Money

OGDEN, Utah – Alleviating older Americans’ depression won’t automatically result in them having more cash for the holidays, according to a study co-published by Brandon Koford, Weber State University assistant professor of economics.

“Older Americans, Depression, and Labor Market Outcomes,” written by Koford and assistant professor Attila Cseh of Valdosta State University in Georgia, recently was published in the online version of Eastern Economics Journal. The study challenges the assertion that depression causes lower wages. Although a correlation exists between depression and lower wages, the study indicates deeper traits might be to blame.

“People go in and out of depressive symptoms, and that’s not really what causes people’s wages to change,” Koford said. “There’s something else going on. These decreases in wages are present even when people aren’t depressed.”

The study found that experiencing symptoms of depression had little effect on wages for either men or women. Experiencing symptoms of depression also had little effect on the hours study participants worked or whether they worked full time.

“I think that feeling better is a sufficient reason to seek help, but we have to be realistic about its labor market outcomes,” Koford said.

Jeff Steagall, dean of WSU’s John B. Goddard School of Business & Economics, said behavioral economics studies like Koford’s and Cseh’s take into account the fact that humans are not always rational.

“Dr. Koford's work is a fine example of how the economics profession is using its models and statistical techniques to shed light on key questions in a variety of other disciplines,” Steagall said.

For their study, Koford and Cseh used data from the Health and Retirement Study (HRS), gathered by the University of Michigan’s Institute for Social Research. In addition to gathering other data, the HRS ranked participants on a depression scale based upon the Center of Epidemiologic Studies Depression Scale questionnaire. 

Koford’s and Cseh’s sample included responses gathered from nearly 12,000 working baby boomers age 65 or younger who were tracked from 1994 to 2008.

The study was published online in September and will be printed at a later date.

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Brandon Koford, assistant professor of economics
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Shane Farver, executive communications coordinator
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