The age-old question of philosophers and financial analysts is: Does more money increase happiness?
For years, the consensus answer was: Yes, but only to a point.
The landmark research on the issue found that happiness doesn’t increase much once a person’s income exceeds $75,000. That 2010 research was led by two Nobel Prize winners, Angus Deaton and Daniel Kahneman, which is why many took it as definitive.
But the conclusion was challenged in 2021 by Matthew Killingsworth of the University of Pennsylvania. His research found that happiness does increase when incomes rise above $75,000 but at a slower rate once income passes that level.
Recently, Kahneman and Killingsworth collaborated with Barbara Mellers to resolve the conflict between the two studies.
The new research concluded that happiness does increase when incomes rise above $75,000 for most people, but not for everyone.
Higher incomes don’t improve the happiness of people classified as the 20% least happy of the population. Once those people are excluded from the data, higher incomes do on average increase happiness.
The unhappy people have their happiness increase as incomes rise to $100,000, but incomes above that level don’t increase happiness for that group.
But here’s the really important point. The median happiness levels on a 100-point scale don’t differ a lot for households with incomes of $15,000 and those with incomes of $250,000.
In other words, higher incomes can increase happiness but not by a lot. Other factors tend to affect happiness more than money does.
Other research found that family circumstances and health have significant influences on happiness for most people. Those factors can have a stronger influence than money.
Keep in mind that these studies focus on median happiness and what affects it. The importance of the factors might be different for you.
Other research I’ve read says these studies miss the real points.
One point is that most people have a happiness set point. Changes in money, health, or family circumstances might change a person’s level of happiness, but the change will be temporary. Absent additional changes, a person’s happiness level will move back toward their set point, or base level.
Another point is that happiness shouldn’t be the focus. Happiness is an emotion and is temporary.
It’s better to focus on longer-term qualities, such as satisfaction, purpose, and fulfillment.
To some people, these are the same as happiness. But others argue these other qualifies are more long-lasting and stable than a superficial and temporary feeling such as happiness.
People should focus on being satisfied and content instead of being happy. For more details, do an internet search such as: What’s more important: happiness or satisfaction?