A recent study disproves the widely held belief that happiness cannot be purchased with money as it shows that people certainly do feel better as their incomes keep on increasing.
According to a report published in Proceedings of the National Academy of Sciences, higher incomes are often linked to steadily rising happiness.
Daniel Kahneman of Princeton University and Matthew Killingsworth of the University of Pennsylvania examined 33,391 persons aged 18 to 65 who live in the United States, are employed and have a yearly household income of at least USD 10,000.
The least happy group’s satisfaction increased with income up to USD 100,000 before declining as income increased. Happiness rises linearly with wealth for people with average emotional health; for the happiest group, the relationship quickens over USD 100,000.
Simply put, this shows that for most people, higher salaries correlate with happier lives, according to author Matthew Killingsworth.
“Those who are financially successful but sad are the exceptions. For instance, more money won’t make you happier if you’re wealthy and unhappy. For everyone else, having more money was, to varied degrees, related to being more comfortable,” he remarked.
According to the researchers, the study demonstrated the existence of both a happy majority and an unhappy minority.
For the former, happiness rises steadily as income increases, whereas for the latter, happiness rises to a specific income threshold before stagnating.
According to Matthew Killingsworth, these results also have applications in the actual world.
“They influence how we consider tax rates or employee compensation. So, naturally, they matter to people as they make job decisions or balance other goals in their lives with a higher income,” according to Matthew Killingsworth.
He did add that money isn’t everything when it comes to emotional well-being. Money is just one of several factors that influence happiness, he claimed.
“Money can undoubtedly assist a little bit, but it’s not the key to happiness,” the researcher remarked.
The new study contradicts the research conducted in 2010 which stated that money can only boost happiness to a certain point which was then estimated to be about USD 75,000 in annual earnings.
Daniel Kahneman, the Nobel-winning economist, was among the two authors who had conducted the earlier study following which the founder of a credit card company raised his employees’ minimum salaries to USD 70,000.
The responses about people’s feelings were recorded through a smartphone application by the researchers which ranged from “very bad” to “very good”.
The study concluded that happiness does increase with growth in yearly earnings up to USD 500,000.