There was a workshop on last Wednesday at the Australian National University (ANU, also my alma mater) on the Economics of Happiness. Professor Paul Frijters of Queensland University of Technology's (QUT) School of Economics and Finance spoke on his paper, Happiness Dynamics with Quarterly Life Event Data (an early discussion paper on this published by Forschungsinstitut zur Zukunft der Arbeit/Institute for the Study of Labor in 2008).
Professor Frijters has assigned monetary values to life events such as marriage, separation, birth of child etc. For example, to a woman, getting married is equivalent to receiving a windfall of nearly $16,000. Speaking to a journalist from the Sydney Morning Herald (article) after the workshop, Frijters said ''losing or gaining money can offset the effect of other life events quite well, and that is what we are formally looking at - the amount needed to offset an event or keep someone happiness-neutral.''
Money might not buy happiness, but it might make up for some of life's challenges.