Are People Who Earn More Money Happier In Daily Life?

Researchers discover that for most people, there is a consistent relationship between greater pleasure and greater wealth, reconciling previously incongruous findings. The exception is those who are wealthy yet miserable; for them, more money does not make things better.

Are those with higher incomes happier in their daily lives? Although it appears to be a simple question, earlier study has produced conflicting results, causing doubt regarding the solution. According to ground breaking research by Daniel Kahneman and Angus Deaton of Princeton University, day-to-day happiness climbed as annual income increased, but beyond $75,000
it levelled out and happiness peaked. In contrast, research by Matthew Killingsworth of the University of Pennsylvania found that happiness increased gradually as income increased well past $75,000, without any sign of a plateau.

Are larger incomes associated with ever-increasing levels of happiness?

The two collaborated antagonistically to resolve their issues, with Penn Integrates Knowledge University Professor Barbara Mellers serving as the mediator. The trio demonstrates in a recent research published in Proceedings of the National Academy of Sciences that, on average, higher incomes are linked to steadily rising levels of happiness. Zoom in, though, and the link is more nuanced, showing that within that broad pattern, a subset of dissatisfied people in each income bracket exhibits a rapid rise in happiness up to $100,000 annually and then plateaus. “In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness,” says Killingsworth, a senior fellow at Penn’s Wharton School and lead paper author. “The exception is people who are financially well-off but unhappy. For instance, if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees.”

Emotional well-being and income aren’t connected by a single relationship

Mellers delves more into this final idea, pointing out that there isn’t a direct link between financial success and emotional well-being. According to her, “the function varies for people with different levels of emotional well-being.” For example, the least happy group’s satisfaction increases with income up to $100,000 before declining as income rises. Happiness rises linearly with income for people with average emotional health, and the association quickens for the happiest group above $100,000.

The researchers joined forces and started this joint project knowing that their earlier research had produced different results. Killingsworth’s 2021 study did not exhibit a flattening tendency, although Kahneman’s 2010 analysis did. By bringing together the various sides and a third-party mediator, an adversarial collaboration of this kind, a concept developed by Kahneman, tries to resolve scientific disputes or conflicts.

Both a happy majority and an unhappy minority exist

A novel theory put out by Killingsworth, Kahneman, and Mellers claimed that there is both a happy majority and an unhappy minority. They concluded that while happiness increases as income increases for the former, it does so only up to a particular income threshold, after which point it stops improving.

They examined the data from Killingworth’s study, which he had gathered using an app he had developed called Track Your Happiness, to test this new hypothesis. They looked for the flattening pattern. The program pings users at random intervals several times per day with a range of queries, such as how they are feeling on a scale from “very good” to “very bad.” Killingsworth determines the relationship between the two variables by averaging the person’s happiness and income. Early in the new collaboration, researchers made the important discovery that the 2010 data, which had shown the plateau in happiness, had really been measuring dissatisfaction specifically rather than pleasure generally. According to Killingsworth, an example makes the concept easier to comprehend. Imagine a dementia cognitive test that the majority of healthy individuals could easily pass.

Even though such a test could identify the presence and degree of cognitive impairment, it wouldn’t provide much information on general intelligence because most healthy people would score perfectly. “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 says. “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.” “The two findings that seemed utterly contradictory actually result from data that are amazingly consistent,” he says.

For emotional well-being, money isn’t the be-all and end-all

Consequences of this work According to Mellers, who contends that there is no better way than adversarial collaborations to resolve scientific conflict, coming to these results would have been difficult had the two study teams not collaborated. “This kind of collaboration requires far greater self-discipline and precision in thought than the standard procedure,” she says.

“Collaborating with an adversary — or even a non- adversary — is not easy, but both parties are likelier to recognize the limits of their claims.” Indeed, that’s what happened, leading to a better understanding of the relationship between money and happiness. According to Killingsworth, these results have applications in the actual world. For starters, they might influence how we consider tax rates or employee compensation. Of course, they matter to people as they choose a career or balance a higher salary with other objectives in life, according to Killingsworth.
However, he adds that for emotional well-being money isn’t the be-all and end-all. “Money is just one of the many determinants of happiness. Money is not the secret to happiness, but it can probably help a bit,” he says.

Story Source:
Materials provided by the University of Pennsylvania. Original written by Michele W. Berger.
Note: Content may be edited for style and length.

Journal Reference:
Matthew A. Killingsworth, Daniel Kahneman, Barbara Mellers. Income and emotional well- being: A conflict resolved. Proceedings of the National Academy of Sciences, 2023; 120 (10) DOI: 10.1073/pnas.2208661120

Page citation:
University of Pennsylvania. “Does more money correlate with greater happiness?”
ScienceDaily. ScienceDaily, 6 March 2023.

Help is here:
Toll-Free Mental Health Rehabilitation Helpline Kiran (1800-599-0019)

Name of the Organisation: Vandrevala Foundation
Vandrevala Foundation is a non-profit that partners with organizations to help communities thrive by providing education and healthcare. Vandrevala Foundation launched a mental health helpline in India in 2009 to offer free psychological counselling and crisis mediation to anyone who is experiencing distress due to depression, trauma, mood disorders, chronic illness, and relationship conflict.
Contact: Email:
Telephone: +91 9999 666 555

1 thought on “Are People Who Earn More Money Happier In Daily Life?”

Leave a Reply