Who’d have thought we’d have gotten all this way in science and never studied whether money can buy happiness? Well, in fact, this HAS been studied, but the results have almost always been inconclusive. This probably has a lot to do with how it’s being studied, what ranges of monetary income you’re talking about, and most importantly, HOW you define ‘happiness’.
And, of course, how you define ‘rich’.
Kahneman and Deaton. “High income improves evaluation of life but not emotional well-being” PNAS, 2010.
In order to study whether money buys you happiness in proper detail, the authors analyzed the responses of 450,000 US residents (whether this translates over to other countries is obviously very up for debate). They then carefully looked at each person’s income, and MODIFIED that income based on things like that person’s congressional district, education, sex, age, race, and even height, in an effort to get rid of a lot of a variance that results from these responses.
But where they really did something different was in how they defined happiness. They divided a measure of “subjective wellbeing” into two categories:
1) Emotional well-being: how happy are you generally? How frequent are your experiences of joy or sadness, anger and frustration? How intense are your daily happy or sad experiences? This is a measure of the emotional quality of your life. For this they looked at reports of happiness, the frequency of smiling and laughter, stuff like that, and worry and sadness. They also looked at stress.
2) Life Evaluation: how happy do you THINK your life makes you? This is a measure of your THOUGHTS about your own life, rather than what happiness or sadness you are directly experiencing. These are questions like “rate on a 1-10 scale how great you think your life is for you”.
And it turns out that, on the whole, Americans are pretty well pleased with their lives. 85{9f43b4361d9a125bc126dd2a2d1949be02545ec69880430bc4fed2272fd72da3} of the people in the survey showed a significant amount of positive affect (smiling, laughter, joy) every day, 24{9f43b4361d9a125bc126dd2a2d1949be02545ec69880430bc4fed2272fd72da3} showed sadness and worry every day, and nearly 40{9f43b4361d9a125bc126dd2a2d1949be02545ec69880430bc4fed2272fd72da3} showed stress (that low?!). And compared to other countries, we’re apparently doing well in terms of happiness and enjoyment, but VERY badly in terms of stress (we’re the 5th most stressed country out of 151 surveyed).
Other things came out: weekend are good, spending too much time alone is bad, illness is a major drain on your emotional well-being, and so is caring for another adult, or a child (major increases in worry and stress there). College graduates report more stress, and otherwise being a college graduation has no significant effect on your daily happy or sad events. Religion increases positive daily life events, but doesn’t decrease sadness or worry.
Smoking turned out to be a REALLY strong predictor of low emotional well-being, and came out regardless of income or education or anything else.
But now, let’s get to the good stuff.
Here you can see three major things (positive daily life events like joy and smiling, NOT having negative events like worry and sadness, and being stress free) plotted against household income in log. These are all things that represent emotional well-being. The DARK line represents life evaluation. You can see that the instances of happiness and sadness and stress plateau and even out at around $75K yearly outhouse income (they increase a little after that, but it’s mostly flat). The LIFE EVALUATION, on the other hand, just keeps going up. So it appears that, past about $75K, you don’t really experience life as being any happier (you have as many sad and worrisome events at $160K as you do at $80K), but YOU think your life just keeps getting better and better and better. Maybe this is why all those celebrities keep saying things like “I’m in a such a good place right now”? (Answer: NO DUH, you live in LA. I hear the weather is very nice there. Instead of talking about places you’re in, why not say “I’m doing great!”?).
One of the interesting things about this figure is that you can see that being “stress free” actually plateaus at a LOWER income than the other two metrics, around $60K. The authors infer, and I agree, that this relative lack of stress is probably related to being less stressed about money.
Sadly, the negative things in life seem to affect people making less than $75K a lot more than higher incomes. Things like headaches and illness are reported more frequently (but whether or not these are related to stress isn’t determined). In addition, the pain of some life occurrences, like divorce or chronic disease, is made a LOT worse by being of lower income (most likely because the loss of money due to those things is going to stress you out a lot more in terms of being able to get by).
So basically, more money does NOT mean more problems, but at a certain level, less money DOES. The authors suggest that, beyond $75K, increases in income don’t further affect things like your ability to spend time with loved ones, avoid disease, and enjoy your free time (as an example, you have the money to take the kids to Disney). According to other data they’ve got, they say that about 1/3 of US households makes over $75K. But this means that TWO THIRDS of US households don’t make that kind of money, and are going to feel the emotional pain of it. Making $75K per year is not an easy goal for a lot of people. And who knows how this translates in other countries, where median incomes are MUCH lower, and where misfortune may be able to his particularly hard.
Now, keep in mind, this doesn’t mean that rich people can’t be miserable. Absolutely they can. But it means that if they ARE miserable, it’s unlikely to be stress and unhappiness tied to their income, but more about other things in their life circumstances.
What it all basically comes down to is that money can’t buy happiness, but it CAN buy life satisfaction (of the kind of “hey! I’ve got more money than that guy!”). So if you want life satisfaction, make MOAR MONEY. If you want happiness, shoot for $75K.
(Source)
Kahneman D, & Deaton A (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences of the United States of America, 107 (38), 16489-93 PMID: 20823223
