According to a new study, people become happier as they earn more money, contradicting the widely held belief that money cannot buy pleasure.
According to the report published in the Proceedings of the National Academy of Sciences, higher incomes are connected with increased levels of happiness.
Daniel Kahneman of Princeton University and Matthew Killingsworth of the University of Pennsylvania examined 33,391 persons aged 18 to 65 who live in the United States, are employed, and have a household income of at least $10,000 per year.
Happiness increased with money until $100,000 for the least happy group, then decreased as income increased. Happiness increases linearly with income for people in the medium range of emotional well-being, and the association accelerates above $100,000 for the happiest group.
“In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness,” said lead author Killingsworth.
“The exception is people who are financially well-off but unhappy. For instance, if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees,” he added.
According to the researchers, the study demonstrates the existence of both a happy majority and an unhappy minority.
Happiness rises as more money comes in for the former; happiness rises as income rises for the latter, but only up to a certain income threshold, after which it stagnates.
According to Killingsworth, these findings have real-world ramifications.
For example, they could inform decisions concerning tax rates or employee compensation. Of course, they matter to individuals as they navigate professional options or evaluate a higher paycheck against other life objectives, according to Killingsworth.
However, he adds that for emotional well-being money isn’t all. “Money is just one of the many determinants of happiness,” he says. “Money is not the secret to happiness, but it can probably help a bit.”