One Type of Happiness: $75,000 a Year

Can money buy happiness? In ways, about $75,000/year can, according to a new study from Princeton University. The further someone’s household income falls below that level, the greater their unhappiness. But no matter how much more than $75,000 people make, it doesn’t bring them any more joy. “High incomes don’t bring you happiness,” conclude the authors, economist Angus Deaton and psychologist Daniel Kahnerman. “But they do bring you a life you think is better.” The study looked at two types of happiness. There’s the more changeable, day-to-day mood such as whether you’re stressed or exuberant. Then there’s the satisfaction level you feel about the path your life is taking. The latter is more heavily influenced by income. The more money people earn about $75,000, the more they believe their life is working. But the money doesn’t make them any more jovial in the morning. So it’s not low income itself that saddens people; it’s the idea that less money makes them feel more ground down by other issues like health and relationship troubles. At $75,000, however, that effect disappears. From there on up, individual temperament and life circumstances like age and education level have much more sway over how a person feels on any given day than money does. The study draws data from more than 450,000 Americans polled by Gallup and Healthways in 2008 and 2009. Participants were asked how they had felt the previous day and how they would rate their life, from being the worst possible to the best.

Warren Bird, Ph.D., is Research Director for Leadership Network and a frequent contributor to this blog, a books blog and a multisite church blog