Can money buy you happiness? We all heard about that cliché: “Money can’t buy you happiness.” The phrase loses its meaning when you compare a millionaire with five houses around the world and a man who got evicted from his house because he can’t pay rent. If you say, “Money can’t buy you happiness,” at that moment, the man who got evicted will not understand or agree with that.
The phrase is usually applicable when rich and fortunate ones don’t feel fortunate or happy with their lives despite the amount of money that they might have.
It’s obvious that a certain amount of money makes a difference between misery and happiness. If we would talk about the amount of money, what amount would it be? In 2010, researchers asked this question and decided to find out. The answer to this question is pretty interesting.
For starters, Angus Deacon and Daniel Kahneman differentiated two types of happiness. The first type of happiness is something they called emotional happiness or emotional well-being. Researchers defined emotional well being as:
“The frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one’s life pleasant or unpleasant.”
The second type of happiness they called self-perception of one’s life.
Researchers analyzed 450,000 responses in total to the Gallup-Healthways Well-Being Index, which is a survey conducted by the Gallup organization. The researchers asked participants things like how they were feeling yesterday and how they feel about their life as a whole. They also had information such as income, gender, and age of participants.
The questions on emotional day-to-day experiences were:
“Did you feel stress during a lot of the day yesterday?”
“Did you smile or laugh a lot yesterday?”
When it comes to the perception of their lives, participants were asked to imagine a ladder with 10 rungs and to assess the worst possible life (rung 0) and the best possible life (rung 10). Then participants were asked:
“On which step of the ladder would you say you personally feel you stand at this time?”
What did researchers find? Why two types of happiness mattered for researchers? When it comes to day-to-day happiness, money certainly plays a great role but only to a certain point. Researchers suggest that the more money you have, your happiness improves until you hit the pay of $75,000 per year. After that, the improvement in happiness levels off which means that someone who is making $150,000 a year isn’t likely to be happier about his day-to-day life when compared to someone making $75,000 per year.
What about our perception of our life?
It seems that people who have more money, have a better and more favorable evaluation of their life. The researcher concluded:
“High income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being.”
Kahneman and Deacon said:
“Low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone.”
It seems that once you have enough money to overcome issues explained above, it doesn’t matter if you have more or if you are a billionaire. Once your life is stable and secure because you have enough money, your satisfaction with your life or daily happiness doesn’t rely on how much money you are making.
However, researchers note that the overall life satisfaction is linked to the level of education which is further linked with the income. Maybe money can’t buy you happiness when you have more than enough but it’s the root cause for unhappiness for those who are poor and don’t have enough.
The study is related to the US residents and it was published in the PNAS journal.