B etween 1972 and 2004, even though the average per capita income in America more than doubled, Americans reported the same general level of happiness. Bigger homes, more SUVs and new refrigerators with automatic ice makers did not necessarily result in greater happiness. Why not?

The answer is not as simple as saying money cannot buy happiness, according to personal finance columnist M.P. Dunleavey. Studies by psychologists and behavioral economists suggest that money can, to a great extent, bring happiness -- but not in the ways most people think. Bottom Line/Personal asked Dunleavey to explain...

Why is more never enough?

We’re stuck on the hamster wheel of acquisition. We use our money to buy stuff, then expect this stuff to make us happy.

Over and over, we learn that buying things is an ineffective way to convert money into happiness -- particularly if our purchases are merely status symbols meant to show off our success or prove that we can keep up with the Joneses. Here is the hard truth: Driving a Jaguar and wearing a Rolex will not make you substantially happier than driving a Toyota and wearing a Timex. There’s always something else we want.

In reviewing a survey of thousands of Americans nearly four decades ago, economist Richard Easterlin found that, on average, people thought that owning 4.4 items emblematic of the good life -- such as a nice car, pool or vacation home -- would satisfy them. At the time, respondents owned, on average, only 1.7 such items. Seventeen years later, Easterlin reviewed an updated survey. At that time, respondents owned 3.1 of the desired goods, on average, but they said that to be satisfied, they would need 5.6 of them.

If buying things does not make us happier, why do we continue to do it?

It’s partially because of brain chemistry. When we consider making a purchase, we experience a burst of activity in the nucleus accumbens -- the pleasure center of the brain. In other words, thinking about acquiring things gives us a high that is somewhat comparable to the high an addict gets from drugs. Unfortunately, this acquisition high soon dissipates, leaving us with less money and a possession that we probably did not need.

There is some speculation among researchers that our brains might be programmed to desire the things that our neighbors have because such thinking was beneficial to our ancient ancestors. If you were a Paleolithic hunter and your neighbors acquired stone spear tips, you would need stone spear tips, too, to get your share of the hunt.

If acquiring possessions is the wrong strategy for being happy, what is the right strategy?

Spending your money on relationships is one terrific way to invest in happiness. Studies have consistently found that the more time we spend around other people, the more we enjoy life. Go ahead and splurge on outings with people you like... and spend on travel to visit loved ones. I recently stopped myself from buying an expensive designer purse by calculating that for the same amount of money, I could buy my father a round-trip plane ticket to visit me. Seeing my dad would bring me much more happiness than any handbag.

What are some other ways to turn money into happiness?

Money invested in personal challenges usually is money well spent -- so long as these challenges are in areas of interest to us.

Mihaly Csikszentmihalyi, PhD, of Claremont Graduate University’s Quality of Life Research Center, has found that people are happiest when they are totally engrossed in activities that deeply challenge them and push their abilities to a new level. If you love to cook, take a course in Tuscan cuisine. If you enjoy sports, consider going to baseball camp for adults.

Money spent on improving our health also tends to make us happier. Surveys conducted by researchers at the University of Pittsburgh found that only 5% of people in poor health say that they are happy, compared with 50% of those in excellent health. Spending money on your health could mean splurging for fresh, natural food ingredients, rather than buying processed meals... or buying fitness equipment or a gym membership.

How do you keep spending under control without feeling deprived?

Sometimes you can get the satisfaction of buying without even spending money. It sounds funny, but I’ve discovered that I get the same rush of acquisition even if I don’t complete a transaction. I click on a shopping Web site -- LLBean.com is my personal favorite -- select a few items for my virtual shopping cart, but turn off my computer before I type in my credit card number and finalize the sale.

Will you be happier saving money by doing a task yourself or by paying someone else to do it?

Any expenditure that increases your peace of mind usually is worth the money. People often think, “I don’t need to hire a financial planner to help me prepare for retirement. I can do it myself,” or “I don’t need to hire a plumber to fix that leak. I’ll manage on my own.” If you lie awake at night wondering if you did the job correctly... or postpone the task for months because you are afraid of getting it wrong, you would be better off paying a professional to help.

Also, you may want to hire someone -- even your neighbor’s son or daughter -- to perform tasks that are well within your abilities, such as housework or yard work -- if you consider these tasks distasteful... if hiring someone buys you much needed free time to enjoy life... or if the task has been on your to-do list for months without moving any closer to completion.

What types of spending would people be most surprised to learn can buy them happiness?

Gifts to charity. Money donated to a good cause doesn’t help just the recipient. The act of giving produces such positive feelings of self-worth in the giver that he/she gets more than his money’s worth. There is even some evidence that giving money to charity makes people healthier.

The secret is to select a cause that is meaningful to you. You won’t get much happiness from charitable giving if someone else selects the charity... or if the money is given to whatever charity calls you to ask for a donation.

How much money does it take for most people to achieve happiness?

It’s not so much the amount that you spend. The idea is, the more you orient your spending toward a happier way of life, the more you gain -- not only emotionally but also financially -- because you will be less inclined to overspend as a means to feel better. Based on a growing body of research, it really does seem that happiness is a good investment.