A recent study has shown that money can actually buy you happiness – that is, up to a point.
In Tuesday’s edition of Proceedings of National Academy of Sciences US researchers report that people’s emotional well-being (i.e. happiness) increases along with their income up to $US75,000 (roughly $AU82,000).
Angus Deaton, an economist at the Centre for Health & Wellbeing at Princeton University, says for people making less than that figure:
“Stuff is so in your face it’s hard to be happy. It interferes with your enjoyment”.
Deaton, along with Daniel Kahneman, a Nobel Prize winning psychologist, reviewed surveys of 450,000 Americans which were conducted between 2008 – 09 for the Gallup-Healthways Well-Being Index. These surveys included questions on people’s day-to-day happiness as well as their overall life satisfaction. The research conducted by these two gentlemen is supported by the Gallup Organisation and the National Institute on Aging.
It was found that happiness increased as income rose, but Deaton noted that the effect levelled out at the $US75,000 mark. Above this point although happiness may have levelled out their overall sense of success or well-being continued to rise along with their earnings.
“Giving people more income beyond 75K is not going to do much for their daily mood … but it is going to make them feel they have a better life”, said Deaton in an interview.
Not unexpectedly, someone who moves from a job with an annual salary of $US100,000 to a job paying double that at $US200,000 realises an improved sense of self. However, Deaton notes that this doesn’t necessarily mean that they are happier in their day-to-day life. These results were similar for other measures too – For example, people really were happier on weekend but their overall deeper sense of well-being didn’t change.
Kahneman & Deaton have said they undertook this study to learn more about economic growth & policy as some have questioned the value of growth to individuals.
Deaton said they were far from definitively resolving that question, but has added:
“Working on this paper has brought me a lot of emotional well-being. As an economist I tend to think money is good for you, and am pleased to find some evidence for that.”
Overall, the researchers said:
“As in other studies of well-being, we found that most people were quite happy and satisfied with their lives.”
Comparing their life-satisfaction results for the research with those of other countries, the researchers said the United States ranked ninth behind the Scandinavian countries, Canada, the Netherlands, Switzerland and New Zealand.
I found this an interesting bit of research, as I have always had a suspicion that money can aid happiness… to a point. But is that because we live in a materialistic world where we think we need more money to buy ourselves happiness? To buy the newest stuff, the best car and the biggest house? Or is it more due to the rising cost of living & that element of life? I think it would be hard to argue against the notion that money does take away a fair bit of worry and help smooth the road.
Katherine is a freelance writer currently based in Sydney. She bought a one-way ticket to Australia in 2006 and has never looked back! Born in Wales, raised in Qatar, Alaska & the UK has meant her love of travelling & experiencing new cultures was instilled in her from a very young age. Keen to pay off her debt, save for that illusive home deposit & buy the dream home, she’s only swayed from her course when a far-away land beckons or Mimco or Witchery are having a sale.
Money provides security and freedom of choice, so of course a person’s happiness is connected to these things. Anyone who argues otherwise has either never had do without either of these things or is denial.