$75K Yearly Income Where Happiness Plateaus? There's More to It

Nobel Prize-winning economist and psychologist Daniel Kahneman has admitted his influential study from a decade ago—suggesting happiness increases with household income only up to $75,000—didn't get it right. The question of whether money can buy happiness has been much debated since Kahneman's 2010 research with fellow Nobel Prize winner Angus Deaton. In 2021, University of Pennsylvania happiness researcher Matthew Killingsworth published a study indicating there was actually no limit to the amount of money that boosted happiness. Hoping for a final answer, Kahneman and Killingsworth teamed up for a new study and found that for most people, Killingsworth's findings ring true.

Happiness was found to increase with income up to $500,000. However, there were few participants among the group of 33,391 working adults with a median home income above that level, which created a limited data set, per CBS News. Still, Kahneman's initial conclusion wasn't far off the truth, according to the study published in PNAS, which found that for the 20% of participants with the lowest levels of emotional well-being, happiness only rose with income up to $100,000, per Bloomberg. At $100,000, miseries like "heartbreak, bereavement, and clinical depression" are seemingly "not alleviated by high income," the study reads. As Killingsworth puts it, "If you're rich and miserable, more money won't help."

What the 2010 study interpreted as applying to the general public actually applied to the unhappiest lot, says Killingsworth. "When we looked at the happiness trend for unhappy people in the 2021 data, we found exactly the same pattern as was found in 2010; happiness rises relatively steeply with income and then plateaus," he says in a release. "The two findings that seemed utterly contradictory actually result from data that are amazingly consistent." For the happiest 30%, more money made quite a difference. Their happiness levels jumped sharply with income over $100,000, according to the study authors. Among them is UPenn psychologist Barbara Mellers, who acted as a third-party mediator. (More happiness stories.)