We all suspected it, and now there’s (even more) research to prove it: Earning more money does actually make people happier. That’s according to a new study from Daniel Kahneman and Matthew Killingsworth, researchers at Princeton University and the University of Pennsylvania, respectively, which finds that happiness rises as income does.
The analysis upends previous research from Kahneman that concluded happiness tends to increase with income only up to about $75,000 in annual earnings. In his 2010 study, earnings above that threshold didn’t seem to have a big impact on a person’s daily happiness.
For the new study — published March 1 in the Proceedings of the National Academy of Sciences journal — the researchers tracked data gathered from more than 33,000 U.S. adults who earn at least $10,000 a year. Participants used a smartphone app that asked about their mood at random intervals during the day.
They found that an increase in earnings up to $500,000 did boost happiness for most people. There wasn't sufficient data to draw conclusions about happiness and income over $500,000 annually.
So while money isn't the only "secret" to happiness, Killingsworth said in a recent statement, "it can probably help a bit.”
On the other hand
That result also comes with one big caveat.
“The exception is people who are financially well-off but unhappy,” Killingsworth explained. About 20% of people are part of this “unhappy minority,” the researchers found. For that group, additional income over $100,000 per year didn’t appear to make a major impact on their mood.
The two researchers suggested that money beyond that threshold isn’t able to alleviate the pain associated with certain life circumstances — think “heartbreak, bereavement and clinical depression.”
“If you’re rich and miserable,” Killingsworth said in his statement, “more money won’t help.”