Our collective understanding of the relationship between money and happiness has shifted over the past two decades as researchers increasingly uncover close ties between individuals’ earnings and their day-to-day happiness.
Studies on Well-Being and Money Contradict
The adage “money doesn’t buy happiness” has evolved in recent decades due to research that shows otherwise.
The idea that an individual’s emotional well-being increases up to a certain income threshold became prevalent due to a wildly popular 2010 Princeton study. In the study, Daniel Kahneman and Angus Deaton reviewed more than 450,000 responses to a daily well-being survey of 1,000 U.S. residents and found that emotional well-being increased with rising income until the $75,000 mark.
In 2021, however, a report from the Wharton School at the University of Pennsylvania revealed there is no such plateau, shifting the public’s perception yet again. The research, led by Wharton School Senior Fellow Matthew Killingsworth, collected 1.7 million emotional snapshots throughout several days of more than 33,000 participants and found that all measured forms of well-being continued to rise with income, regardless of the dollar amount.
“There is no critical level of income that really changes that relationship,” Killingsworth wrote. And though happiness is correlated with other life factors, like education and marital status, he said his findings indicate the relationship between income and happiness is…
