By Christa Bashinski · Entertainment Editor
Money doesn’t buy happiness, or so the saying goes. But recent studies suggest the truth may be a little more complicated.
The age-old phrase emphasizes relationships and experiences over material wealth as the key to a fulfilling life. While these should never be dismissed, research increasingly points to a clear correlation between money and happiness.
A 2010 study by Nobel Prize winners Daniel Kahneman and Angus Deaton reinforced the classic phrase. It discovered a rising correlation until the individual reached an income threshold of $75,000. At that point, no added wages had an impact on one’s overall disposition.
The researchers surveyed 1,000 U.S. citizens daily about their emotional well-being. The results influenced the financial world by sparking conversations on income and tax policies. CEOs like Dan Price have increased their employees’ minimum salaries to $70,000, according to Newsweek.
Eleven years later, Matthew Killingsworth published work conflicting with the economists’ past findings. He determined that increased income does improve reported happiness, exceeding the $70,000 recommendation. Killingsworth accomplished this by surveying 33,391 U.S. adults with steady jobs who answered questions about their emotional state multiple times throughout the day for several weeks.
To reconcile the two studies, Kahneman and Killingsworth joined forces, conducting an adversarial collaboration to determine the truth. Through reexamination of Killingsworth’s data, the new team developed an explanation rationalizing their differences.
There was an overlooked group, an “unhappy minority,” that made up roughly 15% of people in every income bracket, representing a large number that hadn’t originally been accounted for. These individuals faced problems that money couldn’t solve, such as depression, anxiety and other deeply rooted issues.
Since a distinction hadn’t originally been made, Kahneman’s data was skewed, as his questions measured unhappiness rather than overall happiness, disproportionately reflecting the dissatisfied minority. Once Killingsworth’s data was adjusted to separate this group, the same pattern that the original group had found appeared. This information proved the two studies hadn’t been contradictory at all, but rather consistent when compared on equal terms.
For most of the population, happiness tends to increase steadily as income rises. For the “unhappy minority,” Kahneman’s original conclusion holds: happiness increases with income, but plateaus around $100,000.
So, money can buy happiness, to a degree. The study may have proved a linear relationship between the two, but only when adjusted for the individual’s underlying disposition, one that finances alone cannot change.
“If you’re rich and miserable, more money won’t help,” Killingsworth explained.
Ultimately, the correlation did not guarantee a direct relationship. Jennifer Aaker, a marketing professor at Stanford, found that the very nature of happiness shifts with income level. Her research showed that although wealthier individuals tend to report being happier, lower-income individuals often describe their lives as more meaningful.
“Having a sense of meaningfulness is associated with longer-lasting well-being than happiness alone,” Aaker said. She used relationships and religion as examples, highlighting experiences that come at no cost, yet continuously add purpose to life.
Bigger paychecks can’t solve all of life’s problems. While financial security clearly contributes to happiness, a well-rounded sense of true well-being is dependent on purpose, as well as the relationships and experiences that define it.
