Money can indeed buy happiness, new research shows


The adage that money can't buy you happiness may need to be put to bed as scientists find that having more pineapples in your wallet does indeed equal happiness.

Well, at least, more Benjamin Franklins do as a joint study in the US has found that people are generally happier as they earn more.

The study by Daniel Kahneman and Matthew Killingsworth found that happiness rises with income, even accelerating at levels beyond US$100,000 annually up to US$500,000.

money can buy happiness new research shows

This overturns the dominant thinking that happiness plateaus when an income hit US$75,000 which was initially posited by Kahneman, a Nobe Prize-winning economist, in 2010.

His study then concluded "emotional wellbeing [also] rises with log income, but there is no further progress beyond an annual income of $75,000".

Killingsworth, a senior fellow at the University of Pennsylvania's Wharton School, challenged this in a 2021 study that found "experienced wellbeing" can continue to rise with incomes well beyond $200,000.

The two researchers came together for this new study, surveying more than 33,000 US adults with incomes of at least US$10,000.

To track their happiness, participants were asked to report their feelings at random intervals during the day.

The study concluded that "happiness continues to rise with income even in the high range of incomes", showing that on average more money makes us increasingly happier.

In a statement, Killingsworth said in its simplest terms the study suggests people with larger incomes are associated with greater happiness.

"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."

The study did record an unhappy minority of about 20% of participants "whose unhappiness diminishes with rising income up to a threshold, then shows no further progress".

These people tend to experience negative events that cannot be alleviated by earning more money, things like heartbreak, bereavement or clinical depression.

Killingsworth in his statement did make it clear that money isn't everything and is but one determinant of happiness.

It seems another determinant is time off from work with the study finding "an approximately fourfold difference in income is about equal to the effect of a weekend".

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Eliot Hastie was a senior journalist at Money magazine in early 2023. He was previously a producer and presenter at ausbiz where he covered startups, small caps, cryptocurrency and every other investible opportunity for Australians. Eliot has a Bachelor of Arts (Honours) in Journalism from the University of Westminster. He tweets at @Hastie93.