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Contrary to a previous widely publicized study published in 2010, money actually does buy happiness, claims a Nobel prize-winning economist.
The 2010 study, conducted by Nobel prize-winning economists Daniel Kahneman and Angus Deaton, New Scientist reports, “found that the more money someone makes, the happier they are, but the curve flattens between $60,000 and $90,000 a year. With higher incomes than this, more money doesn’t increase happiness any further.”
Now, however, Kahneman, Matthew Killingsworth and Barbara Mellers of the University of Pennsylvania claim that conclusion is no longer accurate.
In their paper published in the Proceedings of the National Academy of Sciences (PNAS) journal, the researchers wrote, “over one million real-time reports of experienced well-being from a large US sample show evidence that experienced well-being rises linearly with log income, with an equally steep slope above $80,000 as below it. This suggests that higher incomes may still have potential to improve people’s day-to-day well-being, rather than having already reached a plateau for many people in wealthy countries.”
Drawing on 1,725,994 experience-sampling reports from 33,391 employed US adults, the present results show that both experienced and evaluative well-being increased linearly with log (income), with an equally steep slope for higher earners as for lower earners. There was no evidence for an experienced well-being plateau above $75,000/y, contrary to some influential past research. There was also no evidence of an income threshold at which experienced and evaluative well-being diverged, suggesting that higher incomes are associated with both feeling better day-to-day and being more satisfied with life overall.
“For very poor people, money clearly helps a lot,” said Killingsworth. “But if you have a decent income and you’re still miserable, the source of your misery probably isn’t something money can fix.”
After reanalyzing the findings of the least happy 20 percent of participants in the original study, the discovered that for the least happy people, happiness didn’t continue to rise once their income reached $100,000.
For the other 80 percent, the researchers found that, in general, happiness actually does continue to rise as their income increases.
The researchers posited that based on the participant’s responses, happiness may be correlated to larger incomes giving people more control over their lives.
“The findings show that money does tend to make you happier unless you suffer from a range of miseries which money cannot alleviate,” said Kahneman.
“If there are six bad things in your life that are making you very unhappy, it might not matter how rich you are,” he added.