After $75,000, Money Can’t Buy Day-to-Day Happiness
By HealthDay News
Money can help buy happiness — at least if you’re bringing in about $75,000 a year, new research shows. While happiness increases along with annual household incomes up to about $75,000, beyond that, earning more money has no effect on day-to-day contentment, according to the study. But that doesn’t mean you should give up trying to get that promotion. While making more won’t help your emotional state on any given day, people who had household incomes above $75,000 were more apt to say they were satisfied overall with their life.
Those who made, say, $120,000 reported more satisfaction with their lives and had a higher assessment of their life overall than those who made less, while those who made $160,000 evaluated their lives even better still.
“It’s really important to recognize that the word ‘happiness’ covers a lot of ground,” said study author Angus Deaton, a professor of economics and international affairs at Princeton University. “There is your overall evaluation of how your life is going, while the other has to do more with emotional well-being at the moment. Higher incomes don’t seem to have any effect on well-being after around $75,000, whereas your evaluation of your life keeps going up along with income.”
The study is in the Sept. 6 early edition of the Proceedings of the National Academy of Sciences.
Researchers used data from the Gallup-Healthways Well-Being Index, which surveyed 450,000 Americans in 2008 and 2009 about their household income, emotional state during the prior day and overall feelings about their life and well-being.
Both measures of happiness are getting at something different, Deaton noted. You might be feeling blue or unhappy one day because your boss hassled you or you got a speeding ticket, but overall, you think life is going pretty well.
Conversely, you might have felt happy, even joyful, on an outing with your friends and family, but are overall not satisfied with your life or the direction it’s going.
So which measure of happiness matters more?
That’s a philosophical question and perhaps one only the individual can answer, Deaton said. “That’s a really deep, hard question. [Both measures] are important. But if you’re unhappy now, the fact your life may be going well doesn’t make up for that.”
Social scientists and psychologists have long grappled with how to measure happiness, said James Maddux, a psychology professor at George Mason University in Fairfax, Va., who was not involved with the study.
The new study does a good job teasing apart the different aspects of emotional well-being, including more immediate emotions vs. bigger-picture life evaluations, Maddux said.
“This study is consistent with a lot of other studies on the relationship between income and happiness or overall life satisfaction,” Maddux said. “What other studies have also shown is that money matters up to a point. But after a certain point, having additional money doesn’t make people like their lives better or feel better about themselves on a day to day basis.”
This holds true in other countries around the world as well, he noted. Once per capita GDP rises to a point in which people are no longer struggling to meet basic needs such as food, clothing, shelter and healthcare, additional increases in overall national wealth don’t seem to make much of a difference in happiness, Maddux said.
Maddux urged America’s beleaguered workers not to get too hung up on the $75,000 figure. That income level can mean very different things depending on how many people are in the family, what sorts of financial responsibilities you have and where you live, he said.
“$75,000 is not a magical figure people need to achieve to be at their happiest,” Maddux said. “The point is there is a threshold at which people probably are not going to be substantially happier if they keep making more money.”
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. The average skews higher than the median because of a few very high incomes, Deaton explained.
While people with household incomes of more than $75,000 probably won’t feel an enduring happiness boost if they are able to earn more, losing substantial income would likely not be good for their emotional well being, the study suggested. As income dropped, respondents reported declining happiness and increased sadness and stress.
And,according to the study, poverty exacerbated the emotional impact of negative life events such as illness and divorce. Nor did the poor get as much of a happiness boost from weekends as those who were better-off, according to the researchers.
“Life is unfair for the poor in all sort of dimensions,” Deaton said.
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