








































Graduate Student Journal of Psychology                                                                             Copyright 2005 by the Department of Counseling & Clinical Psychology 


Graduate Student Journal of Psychology                                                                             Copyright 2006 by the Department of Counseling & Clinical Psychology  
2006, Vol. 8                                                                                                                          Teachers College, Columbia University                          ISSN 1088-4661 
 
 
 

The Poverty of Affluence:   
Addiction to Wealth and its Effects on Well-Being 

Brian J. Sherman 
Teachers College, Columbia University 

 
Although children in affluent families are generally presumed to be at low risk for developmental 
disturbances, recent evidence suggests otherwise.  Affluent children show elevated levels of de-
pression, anxiety, and substance use when compared to national norms in preadolescent and teen-
age cohorts and when compared to their low-income, inner-city counterparts.  These adjustment 
problems are directly linked to the ecological context of affluent communities, particularly paren-
tal- and peer-socialization factors.  This paper briefly summarizes extant evidence, provides fresh 
insight into the negative effects of affluence, discusses limitations of current findings, and direc-
tions for future research. 

 
 

Children from affluent communities are often consid-
ered to be at low risk for mental health problems.  How-
ever, while financial security may provide luxuries and op-
portunities otherwise precluded, there are certain negative 
outcomes of excessive affluence. Children of affluent par-
ents show elevated rates of clinical depression up to three 
times higher than national norms, and substance use is sig-
nificantly higher in affluent samples than in their inner-city 
counterparts. Furthermore, internalizing symptoms have 
been linked to substance use, suggesting that these children 
are self-medicating their depression (Luthar & D’Avanzo, 
1999; Luthar & Becker, 2002).  Findings implicate 
achievement pressures and feelings of isolation as contribu-
tors to these outcomes. This brief report examines further 
the ecological context of affluent communities and the 
negative effects on well-being.                 

 
Understanding abnormal development 

 
One of the first studies on adjustment problems in chil-

dren from affluent communities was conducted by Luthar 
and D’Avanzo (1999). The authors examined associations 
between substance use and two contextual constructs, per-
sonal psychopathology and social competence, by compar-
ing low-income inner-city tenth graders with tenth graders 
from an affluent suburban high school. Personal psychopa-
thology was defined by internalizing and externalizing 
problems, while social competence measures included qual-
ity of peer relations and academic performance. Results 
showed significantly higher tobacco, alcohol, and marijuana 
use in affluent children than in their inner-city counterparts. 
Among affluent males, substance use was highly correlated 
with peer acceptance, implicating peer acceptance in sub-
stance use.  

 
Correspondence concerning this article should be addressed to 
Brian J. Sherman, 180 Claremont Avenue, Apt. 21, New York, 
NY 10027; email: bjs2125@columbia.edu. 

Clinical rates of depression were three times higher 
among tenth grade affluent girls than the national norm for 
all tenth grade girls (21% vs. 7%, respectively), indicating a 
significant problem among this subgroup warranting further 
investigation. In addition, substance use was linked with 
depression and anxiety in the affluent female subgroup. 
This finding is of particular concern as it suggests that these 
girls are possibly self-medicating, a trend which has be-
come more common among females than males (Kandel, 
Ravies, & Davies, 1991). Moreover, research indicates that 
self-medicating substance use is more harmful to overall 
development than socially stimulated substance use (Coo-
per, 1994), placing these girls at even higher risk for long-
term psychological distress.  

As a follow-up, Luthar and Becker (2002) examined 
substance use, particularly alcohol, tobacco, and marijuana 
use, and internalizing symptoms in sixth and seventh grad-
ers from affluent communities. Additional constructs of 
achievement pressures and isolation from parents were 
included as hypothesized predictive factors.  Results were 
consistent with Luthar and D’Avanzo (1999); specifically, 
clinically significant rates of depression in seventh grade 
girls were twice as high as in normative samples (Luthar & 
Becker, 2002). Additionally, peer approval was associated 
with substance use in seventh grade boys. Internalizing 
symptoms—anxiety and depression—were linked with sub-
stance use in boys and girls, again suggesting that these 
children are self-medicating. As hypothesized, achievement 
pressures and isolation from parents were both correlated 
with elevated distress among this sample. These two studies 
demonstrate consistency across age groups indicating sig-
nificant problems with substance use and internalizing 
symptoms in affluent communities. Furthermore, these 
problems may reinforce each other in a negative feedback 
loop via self-medication. 

A more broad-based longitudinal study, following over 
two thousand teenagers through high school and beyond, 
compared happiness and self-esteem among affluent, mid-

30 



SHERMAN 
 

31 

dle-class, and low-income populations. Csikszentmihalyi 
and Schneider (2000) had participants record their moods 
continuously in their natural environment, making the data 
particularly powerful. Findings revealed an inverse rela-
tionship between socioeconomic status (SES) and teenag-
ers’ happiness and self-esteem. Teens from affluent com-
munities had lower self-reported happiness and self-esteem 
than both their middle-class and low-income counterparts. 
This study illustrates an overall trend of poor psychological 
well-being among affluent children, and when paired with 
the aforementioned studies brings to the forefront an issue 
in dire need of further research.  

Given that children in affluent communities show ele-
vated rates of substance use, internalizing symptoms, and 
overall poor psychological functioning and contextual fac-
tors such as peer acceptance, achievement pressures, and 
isolation from parents play a causal role, we must look fur-
ther at the ecological context of affluent communities to 
fully understand the etiology of these harmful realities.     

 
Material Wealth: The Addiction of American  

Affluence 
 
Attaining wealth and status is part of the “American 

Dream.” It is ingrained in the social fabric of America and 
is often mistakenly equated with happiness. While money is 
necessary to obtain food, clothes, and shelter, the question 
remains: does wealth breed happiness?  Evidence suggests 
otherwise. Extensive research on the United States indicates 
that over the past fifty years, while the gross national prod-
uct (GNP) has more than tripled, life satisfaction has not 
changed (Diener & Seligman, 2004). This appears to refute 
the belief that money invariably leads to happiness.  Fur-
thermore, some research indicates that those in economi-
cally developed nations show elevated levels of depression 
(Buss, 2000) and lower subjective well-being (Deiner & 
Biswas-Deiner, 2002) compared to less developed nations. 
However, before we conclude that wealth breeds unhappi-
ness and depression, we must consider other factors that 
may mediate the relationship between financial success and 
poor psychological functioning. As Luthar (2003) suggests, 
“It is not the surfeit of riches in itself, but rather, an over-
emphasis on status and wealth that is likely to compromise 
well-being” (p.1589).     

Along these lines, Whybrow (2005) likens striving for 
material wealth to any addiction where the need for mate-
rial gain can “hijack our reward system” (p. 93). Expanding 
on this idea, other research has shown that once survival 
needs are secured (i.e. food, clothing, and shelter), there are 
diminishing returns from increased wealth; in wealthy na-
tions, well-being is dependent on relative wealth, such that 
more and more money is required to maintain the same 
level of well-being (Myers, 2000; Diener & Seligman, 
2004). In such societies the endless pursuit of relative 
wealth often leads to poor mental health and interpersonal 
deficiencies, affecting not only the individuals but their 

families as well. In summary, increases in material wealth 
do not necessarily result in increased life satisfaction and 
have actually been linked with lower psychological well-
being.   

How does one wind up in such a predicament? Some 
point to personal value systems to explain the links between 
acquiring wealth and personal distress and unhappiness. 
Kasser and Ryan (1996) examined the effects of valuing 
intrinsic versus extrinsic rewards on personal well-being 
and distress. Participants who valued intrinsic rewards, in-
cluding self-acceptance, community service, and personal 
growth, showed lower levels of distress and higher well-
being, than participants who valued extrinsic rewards such 
as financial success, appealing appearance, and social rec-
ognition. Those who viewed financial success as a central 
life goal showed particularly high levels of anxiety and de-
pression. By focusing on the external rewards of financial 
success, intrinsic, self-actualizing tendencies that promote 
personal growth and well-being are neglected. A clearer 
picture begins to emerge as we see the associations between 
extrinsic reward systems and distress and well-being.  

A longitudinal study by Nickerson, Schwarz, Diener 
and Kahneman (2003) provides perhaps the most compel-
ling evidence for the deleterious effects of affluence on 
psychological well-being and family cohesion. Nickerson et 
al. (2003) compared data from a 1976 survey of incoming 
college students assessing importance of financial success 
(“financial goal”) with a 19 year follow-up survey assessing 
overall life satisfaction and satisfaction in other specific 
domains including family, job, and physical health. Finan-
cial goal was negatively correlated with overall life satisfac-
tion, while income level was positively correlated with 
overall life satisfaction. This finding suggests that it is not 
the money itself, since having money can facilitate happi-
ness; rather, it is the excessive preoccupation with acquiring 
financial success that compromises psychological health. 
Moreover, quality of family life suffered the most out of all 
the specific domains assessed among people with high fi-
nancial goals. Family relationships may be particularly vul-
nerable because having high financial goals requires spend-
ing late nights at work and often, frequent business travel. 
Consequently, family interactions can become restricted 
and inadequate.  Specifically, not only are children pre-
cluded positive parental support and love, they learn to 
value extrinsic rather than intrinsic rewards (Kasser &Ryan, 
1996). It is no wonder isolation and achievement pressure 
have been implicated in the mental health problems of af-
fluent children. Case studies by Levine (in press) explain 
this phenomenon. When one or both parents spend exces-
sive time away from home, and “when money becomes 
overly important…work, friendship, marriage, hobbies, 
parenting, spiritual development, and intellectual challenges 
can all fall by the wayside” (p.47). In addition, affluent par-
ents generally underestimate the effects of these absences 
on their children, while children are often painfully aware 
that they are not a top priority.  

 



THE POVERTY OF AFFLUENCE 
 

32 

Interventions: Informing Normal Development 
 
As stated previously, underage drinking has become 

commonplace among affluent suburban high schools across 
the nation (Luthar & Sexton, 2004), and curbing this trend 
requires parents to monitor their children’s activities. Not 
only is monitoring children’s behaviors significantly linked 
with lower rates of drug use and sexual promiscuity, it is 
positively correlated with better academic achievement and 
higher self-esteem (Dishion & Kavanagh, 2003).  

In addition, deeper within the ecological context, there 
exists the issue of parents’ awareness and attention to their 
own mental health problems. Research suggests that afflu-
ent parents may deny their own psychological problems that 
are in need of attention (Luthar & Latendresse, 2005). Con-
sidering the associations among the acquisition of wealth, 
unhappiness, and the erosion of family structure, psycho-
logical interventions aimed at affluent parents may be help-
ful to both parents and children.  

 
Summary and Conclusion 

 
Recent evidence indicates that children in affluent 

communities are at elevated risk for adjustment problems. 
Significantly elevated rates of depression among girls and 
substance use among boys and girls were found in both 
seventh and tenth grade cohorts. Peer relations, achieve-
ment pressures, and isolation from parents are implicated in 
these affluent samples. Thus, the socioeconomic status of 
affluent children by no means inoculates them from psy-
chopathology and in fact, may contribute to its develop-
ment.  

While the evidence shows elevated rates of depressive 
symptoms and substance use in affluent children, it still 
begs the question: how serious are these symptoms over the 
course of development? Additional longitudinal studies 
examining the predictive value of these findings are needed.  
Also, as all of the research on specific indicators of affluent 
youth problems comes from Northeast samples (Luthar, 
2003; Luthar and Sexton, 2004), it is important to conduct 
similar studies with affluent youth from geographically 
diverse areas. Finally, in the interest of public health, re-
searchers must expand on this body of research and inform 
parents of the risks associated with addiction to affluence. 

 
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