Money leads to more happiness in life for most people. So says a new study by researchers Daniel Kahneman and Matthew Killingsworth. And the rule of thumb is: the more money, the happier you are. This correlation exists up to an annual income of $500,000.
This work, published in the Proceedings of the National Academy of Sciences, is at odds with another highly influential study that Daniel Kahneman also collaborated on. Together with Nobel Prize winner Angus Deaton, the study from 2010 came to the conclusion that happiness in life only increases up to an annual income of 75,000, and that this correlation cannot be proven beyond that.
However, both numbers – 75,000 and 500,000 – mean something completely different. An income of $75,000 can be interpreted as follows: With this income, the negative effects of "not having enough money" disappear. You can lead a decent life with it and don't have to be afraid of suffering hardship or not being able to pay rent and electricity. Extra money beyond $75,000 allows for luxurious living on a grand scale. The income can then be used for larger apartments, extensive trips and expensive hobbies. But these effects do not make people happier - that was the situation in 2010. Today's data points in a completely different direction, namely that an additional holiday home, a well-stocked depot or a Porsche in front of the door increase the feeling of happiness.
Not only the results are interesting, but also the collaboration between the researchers Kahnemann and Killingworth: both worked on the subject of "happiness and money", but came to completely different conclusions. But instead of feuding, Kahneman and Killingsworth have teamed up. For the new study, 33,391 professionals in the United States were surveyed, and the group's median household income was $85,000.
The researchers divide the people into two groups. To measure happiness, participants were pinged at random intervals by a smartphone app called Track Your Happiness. Killingsworth said the data was obtained by "repeatedly pinging people at random times in daily life and asking them in real time how lucky they are at that moment." Specifically, the question was: "How are you feeling right now?" And then you could answer spontaneously on a scale from "very bad" to "very good".
For most people, happiness increases directly with income. The 30 percent of the luckiest earn over $100,000. In the lower groups, happiness increases particularly strongly with more money. It can be assumed that existential worries will then disappear with the filled till.
For the vast majority of respondents, happiness values increased up to an income of $500,000. The researchers cannot say whether one becomes even happier beyond that. The group above this value was too small for statistical analysis.
In addition to the lucky high earners, there is a group of about 15 percent whose well-being stops improving once their income reaches $100,000. So you no longer have to suffer material hardship. One could hope that these are minimalists who can be happy with less. But unfortunately that is not the case. That 15 percent are notoriously unhappy. They suffer from something and this suffering is not compensated by better living conditions with more money.
'This income threshold may represent the point beyond which remaining misery is not mitigated by high income,' the researchers write. "Heartache, grief and clinical depression may be examples of such misery." So money doesn't heal all wounds, or as Killingsworth put it in the introduction: "If you're rich and unhappy, more money doesn't help either." The "Happy Third," on the other hand, experience moments of "well-being that increase sharply once they earn more than $100,000."
In order to understand the study, one must not think of an overly euphoric concept of happiness, as we know it from romantic novels, but of somewhat more subdued feelings such as contentment, well-being and joy. Possible interactions between feelings of happiness and the ability to earn money are also not taken into account. It would at least be conceivable that notoriously unhappy and dissatisfied people also have fewer chances of being professionally successful.