Researchers May Have Pinpointed the Exact Amount of Money You Need to Be Happy
Humanity has been debating the truthfulness in that old adage "money can't buy happiness" for centuries, but it seems we still don't have a concrete answer. Some research has found that it does, but only up to $75,000 a year (circa 2010). Other studies have found that it does, as long as you're using it to buy yourself time, by paying for things like housekeeping services, or to purchase consumer goods that you think fit your personality. Now, psychologists from Purdue University are wading into the debate with a new study on money and life satisfaction, finding that people are most satisfied when pulling in a salary of $95,000 a year (per person, that is, not per family).
The study, published earlier this year in Nature Human Behavior, analyzed data from the Gallup World Poll, which includes a representative sample of participants from 164 countries. They were looking to define a point of "income satiation," the point at which more money doesn't make you any happier. It examined responses that had to do with subjective well-being regarding "life evaluation" (as in, where do you sit on a scale of the worst life possible to the best life possible?) and emotional well-being (how did you feel yesterday?).
The researchers found that the ceiling at which more money doesn't provide any more life satisfaction was $95,000, on average. After that, in fact, subjective well-being started to fall as income went up. (Just as Biggie warned us.) Emotional satisfaction, on the other hand, came slightly cheaper—positive emotions were correlated with more money up to $60,000, and negative emotions decreased as salary increased, up until $75,000.
Obviously, though, location matters. A salary of $95,000 can buy you a different life in Thailand than in Sweden. In Western Europe and Scandinavia, the ceiling at which more money begets more problems is $100,000, while in North America, it's $105,000. Australia and New Zealand had the largest average ceiling, at $125,000, while Latin America and the Caribbean had the lowest, at $40,000.
It also varied across education levels, possibly because of different income aspirations and social comparisons that come up when people have, for instance, a law degree versus an associate's degree.
All that said, some comparisons at the very highest income levels were hard to make because of a lack of data—for example, the survey only included 99 people in Sub-Saharan Africa with incomes above $100,000, and only 1311 participants in Western Europe and Scandinavia with incomes over $200,000. The study also couldn't control for the different costs of living within regions—an American paying rent in New York City and an American paying rent in Fort Lauderdale probably don't have the same idea of what an ideal salary would be.
In other words, this study provides yet another piece of evidence that money does, in fact, impact happiness, but only up to a point. Considering the limitations of happiness studies like these, though, we may never be able to figure out exactly what that point is.