Hedonic Treadmill

DEFINITION of 'Hedonic Treadmill'

The tendency of a person to remain at a relatively stable level of happiness despite a change in fortune or the achievement of major goals. According to the hedonic treadmill, as a person makes more money, expectations and desires rise in tandem, which results in no permanent gain in happiness.

Also known as the "hedonistic treadmill".

BREAKING DOWN 'Hedonic Treadmill'

The hedonic treadmill theory explains the oft-held observation that rich people are no happier than poor people, and that those with severe money problems are sometimes quite happy. The theory supports the argument that money does not buy happiness and that the pursuit of money as a way to reach this goal is futile. Good and bad fortunes may temporarily affect how happy a person is, but most people will end up back at their normal level of happiness.

RELATED TERMS
  1. Hedonic Pricing

    A model identifying price factors according to the premise that ...
  2. Happiness Economics

    The formal academic study of the relationship between individual ...
  3. Hedonic Regression

    A method used to determine the value of a good or service by ...
  4. George Bailey Effect

    A feeling of increased gratefulness for what one has upon considering ...
  5. New Growth Theory

    An economic growth theory that posits humans' desires and unlimited ...
  6. Permanent Income Hypothesis

    A theory of consumer spending which states that people will spend ...
Related Articles
  1. Personal Finance

    Small Life Changes That Save You Money

    There are a number of ways your personal life can impact your bottom line.
  2. Personal Finance

    How to Budget and Spend to Maximize Your Happiness

    Spending money on others and buying experiences are just two of the five key principles that lie in money correlating to happiness.
  3. Retirement

    Find Happiness By Altering Life Benchmarks

    It's not fair to compare yourself to the Joneses. Find out how to alter your aspirations and still meet your goals.
  4. Financial Advisor

    What Millionaires Fear the Most

    How much is enough? Millionaires feel major stress over this question.
  5. Financial Advisor

    Is This the Most Important Retirement Investment?

    Giving back in retirement is an oft-ignored but important investment. Giving charitably can be a force for happiness for you, too. Here's what to consider.
  6. Markets

    Rising Prices: Inflation or Quality Improvements?

    Price indices are used to measure inflation, but qualitative improvements in products complicates attempts to isolate the true cause of rising prices.
  7. Financial Advisor

    Why Millionaires are Running Scared

    Most millionaires don't identify as rich and worry about maintaining their wealth. Here's why.
  8. Insights

    5 Lessons That Athletes Can Teach Investors

    Discover the lessons great athletes can teach investors about building wealth and achieving greater success in their investment performance.
  9. Retirement

    Financial Planning: It's About More Than Money

    Determine what you need to do now to make a drastic lifestyle change later.
  10. Trading

    7 Controversial Investing Theories

    We take a closer look at the theories that attempt to explain and influence the market.
RELATED FAQS
  1. Is it always a good investment to get more professional education?

    For example will it pay off for a registered nurse in her mid-forties to take on about $70,000 in debt to get a nurse practitioners' ... Read Answer >>
  2. Why are corporations so concerned about their stock price?

    When the share price of a company is high or increasing, generally corporations, or more specifically their management teams, ... Read Answer >>
  3. Is a job with a 20% vested after 3 years a good thing?

    I used to make $60,000 a year at my old job, but I changed careers and now make $42,000 a year with 20... Read Answer >>
  4. How does behavioral economics treat risk aversion?

    Learn about the relationship between decision-making and risk, as described by one of the foundational theories in behavioral ... Read Answer >>
  5. Why should I invest?

    One of the most compelling reasons for you to invest is the prospect of not having to work your entire life! Bottom line, ... Read Answer >>
  6. How does money supply affect inflation?

    Learn about two competing economic theories of the role of the money supply and whether money supply necessarily causes inflation ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center