About Money & Happiness

More green in your wallet still can’t really buy happiness, but it can color your view of your life a bit rosier.  Researchers at Princeton University have published their intriguing study titled “High Income Improves Evaluation of Life But Not Emotional Well-Being.” In the study, professors Daniel Kahneman and Angus Deaton looked at Gallup Organization data that helped them distinguish between two very different aspects of a person’s well being.

The researchers’ analysis found that the higher a person’s education and income level, the better that individual would perceive his or her life. Yet, when a survey involved specific questions about a person’s everyday experiences and emotions such as happiness or anxiety, the results did not always stack up the same way against income. They found that above $75,000 per year in income, people did not report higher rates of happiness to go along with their seemingly better lifestyles. Instead, their rates of happiness leveled off.

People in the survey whose incomes fell below $75,000 tended to report, as incomes decreased, less happiness and more emotions such as sadness or stress. In a prepared statement summarizing the researchers’ work, a Princeton representative writes, “The pain of life’s misfortunes, including disease, divorce, and being alone, is exacerbated by poverty. In other words, being divorced, being sick, and other painful experiences have worse effects on a poor person than on a rich.” The spokesperson cautioned against oversimplification of the results, such as headlines you may have heard about $75,000 being a sort of magic number for income. You can find the entire report and a clearly written summary at this link.