The causes of happiness. One study said happiness peaked at $75,000 in income.

The causes of happiness. One study said happiness peaked at $75,000 in income.
Photo by Alex Alvarez / Unsplash

The majority opinion in the field of psychology seems to indicate that money does bring happiness , but with nuances. A study by Princeton University reflects this general consensus, showing that by exceeding the income threshold of $75,000 per year, the level of happiness levels out , even though wealth increases . The American socioeconomic reality must be taken into account.

Research carried out in 2021 by the University of Pennsylvania contradicts the above. This would indicate that happiness continues to grow with income , without stagnating when exceeding the threshold of $75,000 per year. For this reason, Daniel Kahneman and Matthew Killinhsworth, responsible for both investigations, teamed up with Barbara Ann Mellers (also from the University of Pennsylvania) to definitively answer whether there is a limit or threshold at which coa could change.

Does it bring joy to everyone?

This collaboration resulted in a new study, which seems to indicate that for most people there is no defined limit . Participants said that the higher their income, including those above $75,000, also increased their happiness.

But the researchers found something curious: happiness generally flattens out after an income of $100,000 , even though these are people who were previously unhappy.

Everything seems to indicate that money brings both joy and satisfaction in human life , but its effect varies for each person. Therefore, the psychological study shows that, for those who have other needs beyond economic ones, earning money will only make them happier up to approximately said income , with increased income being little relevant beyond that. 

A threshold of stagnation

First of all, we had to dig deeper into the reason for this 'plateau' of happiness in the 2010 study , since the same did not happen in the 2021 study. Kahneman commented that this flattening occurred between $60,000 and $90,000. dollars annually , so the figure of $75,000 was the midpoint. But in the most recent case, investigators looked at $100,000 a year, above and below. The effect of inflation also had to be taken into account, with decisive differences between the 2010 work and the two subsequent ones .

Second, with respect to reducing unhappiness and not increasing happiness, all work agrees that higher income is primarily equivalent to a lower degree of dissatisfaction . They also looked at the profiles of those people who enjoy greater well-being with deeper pockets. While this was for almost everyone, happiness levels began to stabilize a bit around the threshold of $500,000 per year , surpassed by few participants).

And the happiest 30% of the population does not experience any slowdown in the increase in their happiness , even accelerating at certain times, and with incomes already above $100,000 . Among the 15% to 20% of those questioned, which was the unhappiest sector, a more pronounced 'plateau' was recorded. This group did experience a reduction in unhappiness with higher incomes, but the trend almost stopped completely above $100,000 per year.

What is the most important?

To conclude, the researchers want to make it clear that these correlations are not very significant with respect to the general level of satisfaction. In short, money does bring happiness to a certain extent, but obviously it cannot change the situation as much as one would like .

"The happiness effect of a roughly fourfold increase in income is very similar to that of caring for someone, twice as much  as being married, and about the same as  that of a weekend away," it says. detailed in the most recent study.

After establishing a general yes, with certain nuances, the research concludes that it is much more satisfying to identify with areas that bring happiness , such as a relationship, hobbies or career, and focus on them.

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