A 2010 study by economist Angus Deaton of Princeton and Nobel Prize winning psychologist Daniel Kahneman found that happiness increases along with income – but only to a point. The two authors analyzed survey results from 450,000 Americans participating in a huge data collection effort called the Gallup-Healthways Well-Being Index. Their analysis of this sea of data led them to conclude that happiness increases along with annual income up to $75,000. People were happier as their income increased but at $75,000 in annual income the income/happiness marriage began to sour (flatten-out). On a daily basis, people who earn more than $75K are no happier than those who make less than $75K. They (high earners) are, however, more satisfied with their life over-all than their less wealthy brethren. It appears that other life factors like one’s health, family, and friends carry sway after the “basics” of food, shelter, and clothing have been met.
For those of us who make less, let’s say $50K per year, there’s still hope. A recent poll by the Marist organization placed this “tipping point” between happiness and income at $50K per year. Those earning less than $50K reported that their money worries spilled over into other areas of their lives and made them less optimistic about the future. At $50K or more, respondents reported that they were happier in nearly every aspect of their lives than their financially challenged cohorts.
The above results are an important reason why many happiness researchers are calling for non-economic measures of well-being, possibly a Gross National Happiness (GNH) index, in addition to economic measures like Gross Domestic Product (GDP) which is largely a measure of personal spending. As the above research suggests, at some point, more money just can’t deliver the goods (pardon the pun).
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Do you think that a GNH should be enacted, if so how exactly would you measure that and what do you believe it should be used for? Would you support a political usage of the GNH, or do you think it should just be informational?
I wonder what other factors contributed to the tested individual’s happiness. I understand money is a big economic indicator of success in the eyes of the World and in particular the United States, but did they question the respondents on their backgrounds? Their neighborhoods? Work life? Friends? I feel like even though money is a large indicator, happiness revolves on relationships and money is only one facet of expressing a person’s relationship with what or who is around him or her.
I am also curious as to what other factors were considered when measuring consumers happiness. Furthermore, I am also wondering if differing demographics were surveyed. You would think that a young single only supporting themselves would be perfectly happy on $50K a year, while maybe a family of five would struggle a little bit more. How much money that is required to upkeep your lifestyle would directly affect how one feels about how much money they are making. If I was making $50K a year this time next year, I would consider myself pretty satisfied.
I think using (in addition ot economic measures) a more qualitative measure like GNH is a great idea. As Socrates said many years ago, happiness is the ultimate goal of all we do. If you believe this, then wouldn’t a measure of happiness be a better way to judge the well-being of a group of people? Economic indicators have their place but overlook the fact that all the increases in personal spending in the US over the last 40-50 years have not incresased our happiness at all. In fact, we are more stressed, anxious, and depressed than any previous generation. Pardon the pun, but material possessions have failed to deliver the goods (happiness). Several good measures of happiness exist and usually entail asking how satisfied one is with their current life. Here’s one example of a happiness question: Taking all things together, how happy would you say you are? (where 0 means extremely unhappy and 10 means extremely happy). There are also longer scales that I would prefer if GNH was goiing to be used to make important governmental decisons that affect the quality of life of the citizens of the US.
This is a hot mess. Pinpointing at which salary dollar amount growing happiness in a marriage takes a turn for the worse? Sure, one could blame a salary increase or decrease for an unhappy marriage, but by no means can I believe that is the source of the problem. I think if the well-being of a marriage relationship is rooted in the growth or decline of a spouse’s salary, it is rooted in rocky soil that will surely lead to destruction. I don’t have a salary yet, nor do I have a spouse, but I pray when the day comes for me to have both that I would not plant my marriage in the rocky soil of financial well-being.
This is crazy. I can’t believe we spend tons of money on education so we can earn more money but it won’t bring us happiness.
I find this very interesting. Although money is essential for living it is not even close being the key to happiness. Regardless if you make $40,000 or $400,000 a year, the important thing is that you are secure with who you are as a person. Find joy in the little things and live for others. I believe those are vital aspects of like that make you happy.
Fine blog. I also think this is crazy. spend tons of money on education, so they can earn more money and succeed in business, but it will not bring us happiness.
Kathryn Zollars spoke all, find joy in small things and live for others. I believe these are vital aspects such as what makes you happy. If the person can live with felizidade no matter the amount of money.
This post reminds me a lot of the one that focused on the divorce rate in America and how couples with financial problems can sometimes face more problems in their marriage. I agree with what Meghan said. I don’t have a salary or a spouse either yet, but I can’t imagine that it would be beneficial to a marriage what so ever to focus so much on the amount of money coming in. Whether it can be proven or not that there is a direct correlation between happiness and money in a family, as cliche as it may sound I don’t think you can put a “price on happiness.”
I found this article very interesting and insightful. The concern I have regarding this topic is the fact that although money can bring some sort of tangible happiness, I feel that money cannot measure happiness overall. Other things bring much more happiness so I feel like there aren’t enough variable considered in this survey.
This surprised me, I honestly thought the income amount would be a little higher than $75,000. I guess it’s true that money doesn’t necessarily buy happiness. It is encouraging to know that you don’t have to be a CEO or a surgeon to find happiness and financial security though. Especially in a nation where money is glorified. Success isn’t everything and when you die you can’t take money with you. I enjoyed reading about this particular study.
I do agree that money can only make you happy to a point, or maybe “happy” is the wrong word. I believe that money can make things easier and less stressful but only in moderation. If $75,000 is what they have found to be that perfect equilibrium, what about those who live in more expensive areas or have more family members? For those in Waco $75,000 may be a comfortable living, but a family of 5 living in Manhattan would not be able to function the same way and live with as much ease as their counter parts. How can they jusitfy this number?
Money makes life easier. A wage bellow 50ooo enable you to buy the necessary stuffs that you need, but you will probably not afford the things that contribute to life quality (such as charter trips etc). A wage above 75000 will make it possible to feel rich and you will be able to indulge in things that not is necessary, but as mention contributes to life quality. To be able to buy these luxury things whenever you want to, will result in that the special thing that you do or buy will not be that special anymore. And therefor ad no extra happiness, it will just be a part of what you expect from everyday life.
You hit the nail on the proverbial head. Up to a point, money does bring increasing happiness, but after this point, the relationship between money and happiness falls apart. You are also correct about experiences like traveling. research tells us that experinces bring longer lasting happiness than possessions.