It’s a question that philosophers, economists and social scientists have grappled with for decades: Can money buy happiness?
This threshold was initially posited by Kahneman, a Nobel Prize-winning economist and psychologist, in a 2010 study that concluded that “emotional well-being [also] rises with log income, but there is no further progress beyond an annual income of $75,000.”
But in 2021, Killingsworth, a happiness researcher and senior fellow at the University of Pennsylvania’s Wharton School, found that happiness does not plateau after $75,000, and that “experienced well-being” can continue to rise with income well beyond $200,000.
Kahneman and Killingsworth said their latest study was an “adversarial collaboration” where they pitted their theories against each other with the help of an arbiter. The latest research adjusted for inflation, they said.
In their study, Kahneman and Killingsworth surveyed 33,391 adults aged between 18 and 65 who live in the United States, are employed and report a household income of least $10,000 a year. The authors said they lacked substantial data for those earning over $500,000.
To measure their happiness, participants were asked to report on their feelings at random intervals in the day via a smartphone app developed by Killingsworth called Track Your Happiness. Killingsworth said in an email that the data came from “repeatedly pinging people at randomly-timed moments during daily life, and asking about their happiness at that moment in real-time.” Specifically, they were asked “How do you feel right now?” on a scale ranging from “very bad” to “very good,” he said.
The study reached two big conclusions: First, that “happiness continues to rise with income even in the high range of incomes” for the majority of people, showing that for many of us, on average having more money can make us increasingly happier.
But the study also found that there was an “unhappy minority,” about 20 percent of participants, “whose unhappiness diminishes with rising income up to a threshold, then shows no further progress.”
These people tend to experience negative “miseries” that typically cannot be alleviated by earning more money; the report cites examples such as heartbreak, bereavement or clinical depression. For them, their “suffering” may diminish as their income rises to about $100,000 but “very little beyond that,” the study said.
“In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness,” Killingsworth said in a statement about the study.
“The exception is people who are financially well-off but unhappy. For instance, if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees.”
The study acknowledges that happiness or emotional well-being is a changing daily scale for many people and that “happy people are not all equally happy” but argues that there are “degrees of happiness” and often a “ceiling” for happiness.
The study also found that money can affect happiness differently, depending on income. Among lower earners, “unhappy people gain more from increased income than happier people do,” it said. “In other words, the bottom of the happiness distribution rises much faster than the top in that range of incomes.”
In his statement, Killingsowrth made clear that money isn’t everything — “just one of the many determinants of happiness.” He added: “Money is not the secret to happiness, but it can probably help a bit.”
The study also made its way to social media Wednesday, with one Twitter user joking: “Anyone who says money doesn’t buy happiness just doesn’t know where to go for shopping.”
Another teased: “Money won’t make you happy, but it’s nicer to cry in a Ferrari.”