Money can buy you happiness, says a study, finally putting an end to the age-old debate.

This is because cash is the most important factor in making people feel content, according to the study by a dozen academics from around the world.

In fact, the researchers have based their conclusion on an analysis of an array of data from 126 countries across the world, the British media reported.

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The findings by the Institute of Economic Affairs have shown that happiness levels correlate with the amount of wealth a person accumulates.

And, it does not level off when the assets reach a certain threshold, say the researchers.

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The finding contradicts the widely held belief that above a certain income level, people do not become any happier.

The study argues a 20 per cent rise in income has the same impact on wellbeing irrespective of how much wealth the person has initially.

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"No country is rich enough to have hit a satiation point, if such a point exists. These findings are robust and use an extremely rich set of data. Richer individuals are happier with their lives," the 'Daily Mail' quoted the study report.

The researchers say this holds true for more or less all the countries studied, in which "the relationship between income and satisfaction is remarkably similar".

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"The government is spending money on collecting happiness statistics in order to promote government policies to try to increase national happiness. This is a flawed policy and based on a complete misconception," Philip Booth, editorial director at the Institute of Economic Affairs, told The Sunday Times.