Money plays an interesting role in the strive for happiness. Despite classic sayings like “Money can’t buy you happiness” and “More money more problems”, society as a whole puts in a whole lot of effort into getting more of that special paper. Many can’t deny the joy they feel when they finally buy the thing they really want, or get a big paycheck. However, if money can actually buy you happiness, then why are there so many miserable millionaires? Like many aspects of life, the relationship between money and happiness isn’t as black and white as many sayings make it out to be.
One of the most commonly accepted answers to the money problem was made by Daniel Kahneman and Angus Deaton in 2010 at Princeton University. Their foundational study surveyed over 450,000 Americans of various economics and societal backgrounds between 2008 and 2009. When the relationship between income and happiness was plotted, there was a strong positive correlation between the two variables, but only up to an income of $75,000 (around $110,000 today), at which point happiness no longer increased with income. They concluded that money doesn’t buy happiness but instead life satisfaction (which some may say is a form of happiness), as money didn’t make people happier after they were able to earn an income that by many people’s metrics is considered very stable. They said the positive correlation between income and happiness between $0 and $75,000, is due to lower income exacerbating “the emotional pain associated with such misfortunes as divorce, ill health, and being alone”. Part of the correlation could be due to confounding variables between income and happiness, as those who make more money are more likely to be higher achievers, and a study by Pew Research Center found that many higher income jobs have higher job satisfaction and meaning rates, which most likely contribute to happiness
In 2021, a study from the University of Pennsylvania by Matthew Killingsworth found evidence that contradicted Kahneman and Deaton’s previous study, in which he found that from a sample size of 33,000 Americans from different economic and societal backgrounds, happiness increased with income indefinitely, far past $75,000. This led to Killingsworth teaming up with Kahneman and Deaton to try and find a more definitive answer to the age-old question that had just been revitalized. Together, their research almost turned out to validate all of their previous answers to the problem, and reveal a more complicated correlation between money and happiness.
They used the same method to get data, surveying people across America from different backgrounds, but instead of just conjoining all the data into one graph, they also produced separate graphs that showed the relationship between money and different levels of happiness. While they did find again that happiness did increase with money, depending on each individual’s level of happiness, money correlated to it in different ways. For the already depressed and miserable, money did increase their happiness up to a $110,000 salary and then plateaued, as was found in the 2010 study. For people in the middle range of happiness, happiness increased linearly with income, even past $110,000. For people with greatly above average happiness, happiness actually increased exponentially with income indefinitely.
Based on Kahneman, Deaton, and Killingsworth’s research in 2023, the generally accepted answer to the question, “Does money buy you happiness?” in psychology and economics is that money will make the happy happier, but it won’t make a rich miserable person happier, explaining why despite their wealth, many millionaires are depressed. However, it perplexes me how the happiest become exponentially happier from many, despite true happiness coming from many non-material factors. So if you’re sad, making some money can help, but if you already did, you might have to fix some other parts of your life.
