Scientists say more money makes us happier

New study suggests that higher income leads to greater happiness for most people, contradicting a widely held belief that happiness plateaus at an annual income of $75,000. The study, conducted by Nobel Prize-winning economist and psychologist Daniel Kahneman and happiness researcher Matthew Killingsworth, found that happiness can continue to rise with income well beyond $200,000. The research surveyed 33,391 adults aged between 18 and 65 living in the US who reported a household income of at least $10,000 a year. Participants were asked to report on their feelings at random intervals in the day via a smartphone app, with the study finding that happiness continues to rise with income for the majority of people. However, the study also found that around 20% of participants experienced negative “miseries” that couldn't be alleviated by earning more money, such as heartbreak, bereavement, or clinical depression. For these people, their “suffering” may diminish as their income rises to around $100,000 but not much beyond that.

The authors referred to their latest study as an “adversarial collaboration,” which saw them pitting their theories against each other with the help of an arbiter. The study was designed to adjust for inflation, and the authors acknowledged that happiness is a changing daily scale for many people. Nevertheless, they argued that there are degrees of happiness and often a ceiling for happiness.

Killingsworth said in a statement about the study that "for most people, larger incomes are associated with greater happiness. The exception is people who are financially well-off but unhappy. For everyone else, more money was associated with higher happiness to somewhat varying degrees."