Mythbuster: Money Can Buy At Least A Little Happiness
We all know the saying that money can’t buy happiness, but two researchers from the Center for Health and Wellbeing at Princeton set out to test the theory scientifically. They learned that the magic number for buying happiness is around $75,000.
Money Doesn't Create Happiness, but Can Ward off Some Misfortune
Angus Deaton, an economist, and colleague Daniel Kahneman, a Nobel Prize-winning psychologist, reviewed surveys conducted by the Gallup-Healthways Well-Being Index on 450,000 Americans in 2008 and 2009. The surveys included questions on people’s everyday happiness and overall satisfaction with life. The team randomly selected 1,000 respondents for their study.
Emotional well-being was defined as the quality of a person’s daily life, assessed by the self-report of time spent in either positive or negative emotional states throughout the previous day. Life evaluation, a person’s thought about their overall life quality, was rated on a scale from zero to 10.
Overall, most people were found to be “quite happy and satisfied” with their lives.
The researchers found that as income increased, so did happiness, but the effect leveled off at about $75,000 per year. Those with lower income reported decreased happiness and increased sadness and stress. "We conclude that lack of money brings both emotional misery and low life evaluation; similar results were found for anger," the study authors said in a statement.
Life’s misfortunes such as poor health and divorce, said Deaton and Kahneman, is exacerbated by poverty. Lower income, for example, has been associated with a higher risk of heart disease.
However, the most interesting part of the study was that those who make more money do not necessarily have more happiness. “Someone who goes from a $100,000-a-year job to a $200,000 one realizes an improved sense of success, but that doesn’t necessarily mean they are going to be happier,” said Deaton.
“It’s really important to recognize that the word ‘happiness’ covers a lot of ground,” concludes Deaton. "Beyond $75,000 in the contemporary United States, higher income is neither the road to experienced happiness nor the road to the relief of unhappiness or stress, although higher income continues to improve individuals' life evaluations."
Only about one-third of households in the US have incomes above $75,000. In 2008, average U.S household income was about $71,500, while the median -- or the point at which half of incomes are higher and half are lower -- was $52,000.