Does making more money actually lead to more happiness?

PHILADEPLHIA — Who doesn’t want more money? It seems like a no-brainer to always take more cash, but does it actually lead to a happier life? Researchers say the answer isn’t so clear cut.

In 2010, work published by researchers at Princeton found that day-to-day happiness increased steadily alongside annual income. Interestingly, however, it leveled off after people started making over $75,000. More recently, in 2021, researchers from the University of Pennsylvania actually found that happiness still continued to rise well beyond that annual income, with no plateau in sight. In light of these variations, the researchers from each study worked together to get to the bottom of this.

Researchers call this kind of joint project an adversarial collaboration. It aims to settle scientific disputes by bringing the researchers together with a mediator. Matthew Killingsworth from UPenn, Daniel Kahneman from Princeton, and arbiter Barbara Mellers shifted their focus in this new study to a new hypothesis explaining that both a happy majority and an unhappy minority can coexist. In other words, for most people, their happiness will just keep going up as they make more money, while it’ll level off for a few high earners.

To test things out, the team looked for the plateau pattern in data from Killingsworth’ study, which he collected through his own app called “Track Your Happiness.” Throughout the day, the app would randomly sound and prompt people to answer a variety of questions including how they feel on a scale from “very good” to “very bad.” From the average of all answers, Killingsworth drew his conclusions.

During their analysis, the researchers noticed that the 2010 data only measured unhappiness, rather than general happiness.

“It’s easiest to understand with an example,” Killingsworth says in a university release.

Man throwing money into the air like he's rich
(© deagreez –

If you imagine a cognitive test for dementia that most people would easily pass, it wouldn’t tell much about actual intelligence because, at baseline, most people taking the test without dementia would pass with flying colors.

“In the same way, the 2010 data showing a plateau in happiness had mostly perfect scores, so it tells us about the trend in the unhappy end of the happiness distribution, rather than the trend of happiness in general. Once you recognize that, the two seemingly contradictory findings aren’t necessarily incompatible,” Killingsworth continues. “And what we found bore out that possibility in an incredibly beautiful way. When we looked at the happiness trend for unhappy people in the 2021 data, we found exactly the same pattern as was found in 2010; happiness rises relatively steeply with income and then plateaus.”

So essentially, the findings aren’t so different after all.

“The two findings that seemed utterly contradictory actually result from data that are amazingly consistent,” the study author adds.

They all agree that this collaboration has valuable implications. Without it, they believe it would still be difficult to reach a solid conclusion to this topic. Killingsworth also points out that money isn’t everything for emotional well-being, and there’s a lot of other moving parts.

“Money is just one of the many determinants of happiness,” the researcher concludes. “Money is not the secret to happiness, but it can probably help a bit.”

The findings are published in the Proceedings of the National Academy of Sciences.

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About the Author

Shyla Cadogan, RD

Shyla Cadogan is a DMV-Based acute care Registered Dietitian. She holds specialized interests in integrative nutrition and communicating nutrition concepts in a nuanced, approachable way.

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  1. Thanks for a good article. At 85 I am happy and having plenty of money is a large enabler of that happiness. I don’t owe any money, and that is a happy feeling all by itself. Zero debt brings me peace. I am financially helping out a family that has had a bad streak of costly illness. That feels great, as does paying another relative’s collge tuition and rent. It is just very reassuring to be able to have excellent help when I need it. Money makes that, and paying well, possible. My wife died two years ago, to my great sorrow. But I also have a long and happy marriage to look back on. There was plenty of money to provide her with help during her illness. Still, money isn’t everything and I miss my wife more than I can say.

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