Is money the key to happiness according to economics?is this with diminishing marginal utility of income?
Like the previous post, economics does not presume to dictate what happiness is and even if it did, it would not reflect the many people in the world whose views would differ greatly. However, I think we can make one generalization.
The more materialistic the society is, the more important money will be. In addition, the more money will be associated with happiness, because it is with money that one is able to purchase goods and services. So, for example, many people in the West - especially large cities like New York - will equate money with happiness. This is why many of the work long hours.
If a society is less materialistic, then money, of course, would not be the key to happiness. Other things will replace it.
Economics does not (and does not claim to) have anything to say about what causes happiness. It can only study what choices the average person is likely to make when they face the fact of scarcity.
When economists talk about diminishing marginal utility of income (or of anything else) they are talking about how much the next bit of income is likely to matter to a person. But they can not say anything about whether that will make a person happy.
So, economics can say that money is the key to buying things. And it can say that people usually buy things when they have money. But it can't say if buying those things makes them happy.