Money Buys Happiness Only Up to a Point
Money might give you a sense of overall satisfaction with life, but the extra dough won’t ensure days full of laughter and joy, a new survey analysis of income and happiness suggests.
Results showed that as a person’s income increases so does their overall satisfaction with life, but the moment-to-moment enjoyment of those days depended more on social and physical factors, such as whether a person smoked or spent the day alone.
These findings agree with a similar analysis of global happiness, in which the wealthiest nations, such as the United States, weren’t necessarily the happiest. For instance, the United States came in at No. 26 out of 132 nations on daily happiness. Another study on overall satisfaction showed those living in the wealthiest and most tolerant states were happiest by the measure used in the study. [Happiest States Revealed]
In the new study, Daniel Kahneman and Angus Deaton of Princeton University took a stab at figuring out whether and how income affected each of the two well-being types: emotional well-being and overall life satisfaction. To do so, they analyzed more than 450,000 responses to the Gallup-Healthways Well-Being Index, a daily survey of 1,000 U.S. residents conducted by the Gallup Organization.
They looked at percentage changes in income rather than absolute numbers.
“In the context of income, a $100 raise does not have the same significance for a financial services executive as for an individual earning the minimum wage, but a doubling of their respective incomes might have a similar impact on both,” the researchers wrote this week in the journal Proceedings of the National Academy of Sciences.
For life evaluation, participants indicated on a scale from zero to 10, from worst to best possible, how they would rate their lives. For emotional well-being, participants answered yes/no questions about whether they had experienced various positive and negative emotions a lot during the prior day.
About 85 percent of respondents indicated they experienced a lot of positive emotions, including feelings of happiness, enjoyment and laughter/smiling on the previous day, while 24 percent felt a lot of sadness and worry. The average life-evaluation score was 6.76 (with 10 being the best possible life).
Physical illness, headaches, loneliness, and caring for an adult were linked to lower emotional well-being. Being a college graduate was associated with high life evaluation, but that diploma didn’t do much for daily enjoyment.
The limits of money
Low income seemed to magnify the emotional pain of life’s misfortunes, including divorce, illness and loneliness. For instance, for those with a monthly income of at least $3,000, 38 percent who reported headaches also reported a lot of sadness and worry, compared with 19 percent without headaches. But headaches seemed to take a greater toll on those making less than $1,000 a month, who reported “blue feelings” at rates of 70 percent when they had headaches and 38 percent when they didn’t.
Beyond an average of $75,000, annual income no longer played a role in boosting how happy a person felt daily.
The researchers suggest that making anything more than $75,000 no longer improves a person’s ability to spend time with friends, avoid pain and disease and enjoy leisure time – all factors involved in emotional well-being.
“It also is likely that when income rises beyond this value, the increased ability to purchase positive experiences is balanced, on average, by some negative effects,” they write. For instance, a past study revealed a link between high income and a reduced ability to savor small pleasures, the researchers noted.
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Jeanna served as editor-in-chief of Live Science. Previously, she was an assistant editor at Scholastic's Science World magazine. Jeanna has an English degree from Salisbury University, a master's degree in biogeochemistry and environmental sciences from the University of Maryland, and a graduate science journalism degree from New York University. She has worked as a biologist in Florida, where she monitored wetlands and did field surveys for endangered species. She also received an ocean sciences journalism fellowship from Woods Hole Oceanographic Institution.
By Ben Turner