Does Money Make You Happy?

I came across two different answers to this question today in two different sources. I don't know the answer, but I do know that I would like more money, so revealed preference tells me "yes." Decide for yourself:

Yes, say Jonathan Gardner and Andrew Oswald, courtesy of Andrew Gellman:

One of the famous questions in social science is whether money makes people happy. We [Gardner and Oswald] offer new evidence by using longitudinal data on a random sample of Britons who receive medium-sized lottery wins of between £1000 and £120,000 (that is, up to approximately US$ 200,000). When compared to two control groups – one with no wins and the other with small wins – these individuals go on eventually to exhibit significantly better psychological health. Two years after a lottery win, the average measured improvement in mental wellbeing is 1.4 GHQ points.

No, say Daniel Kahneman, Alan Krueger, David Schkade, Norbert Schwarz, and Arthur Stone (working paper version), courtesy of Gregg Easterbrook, the Tuesday Morning Quarterback:

The belief that high income is associated with good mood is widespread but mostly illusory. People with above-average income are relatively satisfied with their lives but are barely happier than others in moment-to-moment experience, tend to be more tense, and do not spend more time in particularly enjoyable activities. Moreover, the effect of income on life satisfaction seems to be transient. We argue that people exaggerate the contribution of income to happiness because they focus, in part, on conventional achievements when evaluating their life or the lives of others.