After reaching an income of $75,000, money doesn’t buy happiness.
Does happiness rise with income? In one of the more scientific attempts to answer that question, researchers from Princeton have put a price on happiness. It’s about $75,000 in income a year.
They found that not having enough money definitely causes emotional pain and unhappiness. But, after reaching an income of about $75,000 per year, money can’t buy happiness. More money can, however, help people view their lives as successful or better.
In the study, researchers tried to evaluate the effect of money in two ways: One was on how people think about their lives and the other was on the feelings they have as they experience life. Responses from more than 450,000 Americans, gathered in 2008 and 2009, were evaluated.
The study found that people’s evaluations of their lives improved steadily with annual income. But the quality of their everyday experiences — their feelings — did not improve above an income of $75,000 a year. As income decreased from $75,000, people reported decreasing happiness and increasing sadness, as well as stress. The study found that being divorced, being sick and other painful experiences have worse effects on a poor person than on a wealthier one.
“More money does not necessarily buy more happiness, but less money is associated with emotional pain,” the authors wrote. “Perhaps $75,000 is a threshold beyond which further increases in income no longer improve individuals’ ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure.”
This is not to say that a sudden windfall of cash won’t brighten the day of your average $75,000-a-year worker.
“Our data speak only to differences,” the authors wrote. “They do not imply that people will not be happy with a raise from $100,000 to $150,000, or that they will be indifferent to an equivalent drop in income…. What the data suggest is that above a certain level of stable income, individuals’ emotional well-being is constrained by other factors in their temperament and life circumstances.”
So, while it’s important to have good feelings, it is also good to think your life is going well. What the study does not explain, the authors said, is which of those factors is more important.
The study was released Monday in the Proceedings of the National Academy of Sciences.