Money only buys happiness for a certain amount

February 13, 2018 by Amy Patterson Neubert, Purdue University
Credit: George Hodan/public domain

There is an optimal point to how much money it takes to make an individual happy, and that amount varies worldwide, according to research from Purdue University.

"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," said Andrew T. Jebb, the lead author and in the Department of Psychological Sciences. "It's been debated at what point does money no longer change your level of well-being. We found that the ideal income point is $95,000 for and $60,000 to $75,000 for . Again, this amount is for individuals and would likely be higher for families."

Emotional well-being, or feelings, is about one's day-to-day emotions, such as feeling happy, excited, or sad and angry. Life evaluation, really , is an overall assessment of how one is doing and is likely more influenced by higher goals and comparisons to others.

"And, there was substantial variation across world regions, with satiation occurring later in wealthier regions for life satisfaction," Jebb said. "This could be because evaluations tend to be more influenced by the standards by which individuals compare themselves to other people."

Jebb's area of expertise is in industrial-organizational psychology. The senior author on the paper is Louis Tay, an assistant professor of . The research is published in Nature Human Behaviour.

The research is based on data from the Gallup World Poll, which is a representative survey sample of more than 1.7 million individuals from 164 countries, and the estimates were averaged based on purchasing power and questions relating to life satisfaction and well-being. For reporting this study, the amounts are reported in U.S. dollars, and the data is per individual, not family.

The study also found once the threshold was reached, further increases in income tended to be associated with reduced life satisfaction and a lower level of well-being. This may be because money is important for meeting basic needs, purchasing conveniences, and maybe even loan repayments, but to a point. After the optimal point of needs is met, people may be driven by desires such as pursuing more material gains and engaging in social comparisons, which could, ironically, lower well-being.

"At this point they are asking themselves, 'Overall, how am I doing?' and 'How do I compare to other people?'" Jebb said. "The small decline puts one's level of well-being closer to individuals who make slightly lower incomes, perhaps due to the costs that come with the highest incomes. These findings speak to a broader issue of money and happiness across cultures. Money is only a part of what really makes us happy, and we're learning more about the limits of ."

The research by Jebb and Tay was supported by Purdue's Department of Psychological Sciences. Also contributing to the study were Ed Diener and Shigehiro Oishi from the Department of Psychology at the University of Virginia.

Explore further: How much people earn is associated with how they experience happiness

More information: Andrew T. Jebb et al, Happiness, income satiation and turning points around the world, Nature Human Behaviour (2018). DOI: 10.1038/s41562-017-0277-0

Related Stories

How much people earn is associated with how they experience happiness

December 18, 2017
People who earn more money tend to experience more positive emotions focused on themselves, while people who earn less take greater pleasure in their relationships and ability to connect with others, according to research ...

Increases in personal income important for happiness worldwide, new study says

December 3, 2012
For people living in both rich and poor countries, the average person's happiness is based on a combination of individual wealth, possessions and optimism, according to an analysis of new worldwide survey findings published ...

Recommended for you

Link between hallucinations and dopamine not such a mystery, finds study

February 16, 2018
Researchers at Columbia University Irving Medical Center (CUIMC) and New York State Psychiatric Institute (NYSPI) found that people with schizophrenia who experience auditory hallucinations tend to hear what they expect, ...

People find comfort listening to the same songs over and over, study finds

February 16, 2018
With the frequency that some people play their favorite song, it's a good thing vinyl records aren't used often because they might wear out.

Ketamine found to reduce bursting in brain area reducing depression quickly

February 15, 2018
A team of researchers at Zhejiang University in China has found that the drug ketamine reduces neuronal bursting in the lateral habenula (LHb) brain region, reducing symptoms of depression in rodent models. In their paper ...

What predicts the quality of children's friendships? Study shows cognition, emotion together play

February 15, 2018
Whether children think their peers' intentions are benign or hostile, and how those children experience and express their own emotions, may influence the quality of their friendships, according to a new study from the University ...

Evidence shows pets can help people with mental health problems

February 15, 2018
The study of 17 research papers by academics at the Universities of Manchester, Southampton and Liverpool, concludes that pets can help people manage their long-term mental health conditions.

Personality: Where does it come from and how does it work?

February 14, 2018
How do our personalities develop? What do we come with and what is built from our experiences? Once developed, how does personality work? These questions have been steeped in controversy for almost as long as psychology has ...

1 comment

Adjust slider to filter visible comments by rank

Display comments: newest first

evansomd
not rated yet Feb 13, 2018
What is the life satisfaction amount for the United States? My satisfaction would increase greatly with a very small amount of additional details in this story. Thank you :)

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.