How Much Money Does It Take to Be Happy?
Money may not buy you love, but it turns out that the green stuff can bring happiness, to a point: New research finds that there's a limit to how beneficial a lofty income is to an individual's well-being.
And that sweet spot in income, the new study revealed, is largely related to where a person lives.
"That might be surprising, as what we see on TV and what advertisers tell us we need would indicate that there is no ceiling when it comes to how much money is needed for happiness, but we now see there are some thresholds," lead study author Andrew Jebb, a doctoral student in the Department of Psychological Sciences at Purdue University, said in a statement.
Jebb and his colleagues used survey data from the Gallup World Poll collected from more than 1.7 million adults ages 15 and older from 164 countries. Participants answered questions related to life satisfaction and well-being, as well as purchasing power. Whereas emotional well-being refers to a person's day-to-day feelings of happiness, excitement, sadness and anger, overall satisfaction in life is largely influenced by higher goals and a comparison of one's belongings with others' stuff. [5 Wacky Ways To Quantify Happiness]
On average, the research revealed the ideal income point, or "satiation," is $95,000 for overall life satisfaction and $60,000 to $75,000 for emotional well-being. The highest satiation income related to one's overall life evaluation was found in Australia and New Zealand, where happiness increased up until about $125,000. By contrast, the satiation income in Latin America and the Caribbean, was $35,000. In North America, however, the threshold for happiness was reached with an income of $105,000. This data suggests that income matters more to individuals living in wealthier nations, according to the study.
"Again, this amount is for individuals and would likely be higher for families," Jebb said in the statement. "And there was substantial variation across world regions, with satiation — the point beyond which no more happiness is gained and, in fact, satisfaction goes down — occurring later in wealthier regions for life satisfaction. This could be because evaluations tend to be more influenced by the standards by which individuals compare themselves to other people."
However, once an individual reaches that threshold of happiness, additional increases in income resulted in reduced life satisfaction and a lower level of emotional well-being, according to the study. The researchers said this is likely because money fulfills basic needs, such as purchasing necessities and paying bills, but after people's needs are met, they are driven by material gains and social comparisons that may ultimately lower their well-being.
"At this point, they are asking themselves, 'Overall, how am I doing?' and 'How do I compare to other people?'" Jebb said in the statement. "The small decline puts one's level of well-being closer to [that of] individuals who make slightly lower incomes, perhaps due to the costs that come with the highest incomes."
The researchers also examined the influence of gender and education on an individual's optimal income. Overall, there was no significant evidence suggesting the link between income and happiness was stronger for men or women. However, income satiation did vary based on an individual's level of education. Specifically, individuals with a higher education reported a more positive life evaluation and emotional well-being in relation to a higher income. This is likely due to income aspirations and social comparisons with different groups of people, the researchers said.
The study builds on previous findings that suggest people with higher incomes devote more time to working, commuting and/or child care and, as a result, feel more stress and tension in their daily lives than those in lower income brackets.
"These findings speak to a broader issue of money and happiness across cultures," Jebb said. "Money is only a part of what really makes us happy, and we're learning more about the limits of money."
The research was published Jan. 8 in the journal Nature Human Behaviour.
Originally published on Live Science.
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