A recent study challenges the popular belief that money can’t buy happiness, finding that people tend to become happier as their income increases.
The research, published in the Proceedings of the National Academy of Sciences, involved surveying 33,391 employed adults in the US aged between 18 and 65 with a household income of at least $10,000 per year. Daniel Kahneman from Princeton University and Matthew Killingsworth from the University of Pennsylvania were the two prominent researchers involved in the study.
The study discovered that the level of happiness increased with income for the least happy group until it reached $100,000, after which there was no further increase. For those in the middle range of emotional well-being, happiness increased linearly with income, and for the happiest group, the association with happiness actually accelerated above $100,000.
According to the lead author of the study, Killingsworth, the findings indicate that, for the majority of people, a larger income corresponds with greater happiness.
“In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness,” said lead author Killingsworth.
“The exception is people who are financially well-off but unhappy. For instance, if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees,” he added.
However, there is an exception to this, where some individuals who are financially well-off may still be unhappy, in which case additional money won’t help. The study highlights the existence of both a happy majority and an unhappy minority, with the former experiencing increasing levels of happiness as income rises and the latter experiencing an improvement in happiness up to a certain income threshold, beyond which there is no further progress.
These results have practical implications, including informing discussions around tax rates and employee compensation, as well as for individuals making career choices or deciding between a higher income and other priorities in life. Nonetheless, Killingsworth emphasizes that money is just one factor among many that influence happiness, and although it may offer some help, it is not the key to happiness.