Are people who earn more money happier in everyday life? Although it seems like a simple question, the research carried out so far has produced conflicting results, so the answer remains uncertain.
A seminal paper published in 2010 by Daniel Kahneman and Angus Deaton of Princeton University (United States), had discovered that the daily happiness increased as annual income increasedbut for above $75,000 stabilized and happiness it stagnated. Instead, work published in 2021 by Matthew Killingsworth of the University of Pennsylvania found that the happiness increased steadily with income above $75,000, with no evidence of plateau.
To reconcile the differences, the two paired off in what’s known as an adversarial collaboration, joining forces with Penn University Integrates Knowledge professor Barbara Mellers as arbitrator. In a new article published in ‘Proceedings of the National Academy of Sciences’, the trio shows that, on average, the higher earnings are associated with increasing levels of happiness.
However, if you zoom in, the relationship becomes more complex, revealing that, within that general trend, a cohort unhappy within each income group shows a strong increase in happiness up to $100,000 per year and then levels off.
“In simpler terms, this suggests that for most people the higher income is associated with greater happiness“says Killingsworth, a professor at the Wharton School in Pennsylvania and the paper’s lead author. “The exception is people who are financially well off but unhappy. For example, If you’re rich and broke, more money won’t help youFor everyone else, more money was associated with greater happiness to somewhat variable degrees.
“In simpler terms, this suggests that for most people higher income is associated with higher happiness.”
Mellers delves into this last notion, pointing out that emotional well-being and income are not connected by a single relationship. “The function differs for people with different levels of emotional well-being,” she says. Specifically, for the least happy group, happiness increases with income up to $100,000, and then shows no increase as income increases. For those in the middle range of emotional well-being, happiness increases linearly with income, and for the happiest group the association accelerates above $100,000.
join forces
The researchers began this combined effort by acknowledging that their previous work had reached different conclusions. The study of Kahneman in 2010 showed a pattern of flattening, while the one in Killingsworth of 2021 did not. As its name suggests, a adversarial collaboration of this type – a notion originated by Kahneman – aims to resolve scientific disputes or disagreements by bringing together the disagreeing parties, together with an external mediator.
Killingsworth, Kahneman, and Mellers focused on a new hypothesis that there is both a happy majority like a unhappy minority. For the first, they conjectured, happiness keeps increasing as more money comes in; the happiness of the second improves as income increases, but only up to a certain income threshold, after which no further progress.
To test this new hypothesis, they looked for the flattening pattern in data from Killingworth’s study, which he had collected through an app he created called Track Your Happiness. Several times a day, the app asks participants at random times how do you feel on a scale from “very good” to “very bad”. Making a average happiness and income of the personKillingsworth draws conclusions about the relationship between both variables.
A breakthrough in the new association came early on, when the researchers realized that the 2010 data, which had revealed the happiness plateau, had actually been measuring happiness. unhappiness in particular and not happiness in general. “It’s easier to understand with an example,” Killingsworth says. “Imagine a cognitive test to detect dementia that most healthy people pass easily. Although such a test could detect the presence and severity of cognitive dysfunction, it would not reveal much about general intelligence, since most healthy people would receive the same perfect score,” he introduces.
“Similarly, the 2010 data showing a plateau in happiness had mostly perfect scores, so it tells us about the trend at the unhappy end of the happiness distribution, rather than the trend for happiness.” in general. Once this is recognized, the two apparently contradictory results are not necessarily incompatible“, afirma Killingsworth.
What they discovered corroborated that possibility “in an incredibly beautiful way,” according to the researcher. “When we look at the trend in the happiness of disgruntled people in the 2021 data, we find the exact same pattern that was found in 2010; happiness rises relatively steeply with income and then levels off“, he says. “The two findings that seemed totally contradictory are actually the result of amazingly consistent data,” he says.
Implications of this work
According to Killingsworth, these conclusions have real-world implications. On the one hand, they could serve to reflect on tax rates or how to compensate employees. And, of course, they are important to people when choosing their career or weighing higher income against other priorities in life, Killingsworth says.
“Money is just one of the many determinants of happiness”
However, he adds that, for emotional well-being, money is not everything. “Money is just one of the many determinants of happiness. Money isn’t the secret to happiness, but it can probably help a little,” he says.
