The Price of Happiness

Much research has focused on what makes people happy, but there are no definitive conclusions. For ages, adages that money does not equal happiness have been repeated by philosophers, religious leaders, and cultural icons. Now, a new study debunks that myth. An analysis of income and happiness in the United States reveals that a salary of $75,000 does, in fact, buy happiness.

The study, conducted by an economist and a psychologist and published in the Proceedings of the National Academy of Sciences (PNAS), evaluated data from the Gallup-Healthways Well-Being Index, a daily survey of 1000 residents of the United States. The responses of more than 450,000 people from 2008 and 2009 were included in the analysis. The respondents were asked questions about their day-to-day happiness, also called emotional or hedonic well-being, and measures  the frequency and intensity of emotions like joy, anger, frustration, worry, anxiety, and affection. The respondents also rated their overall life satisfaction, including goal attainment and emotional stressors like caring for a sick relative or being divorced. Overall, the authors found that emotional well-being did rise steadily as income rose. But, this day-to-day happiness hit a plateau at an annual salary of $75,000. Salaries greater than $75,000 were not associated with more day-to-day happiness. However, higher income was associated with greater life satisfaction. The more income people earned, the better overall life they reported, with no apparent plateau.

On the opposite end of the spectrum, low income was correlated with low emotional well-being and low life satisfaction. Low income exacerbates the stress associated with difficult life situations such as illness and loneliness. Below the income plateau of $75,000, emotional pain associated with life’s stressors was progressively worse as income decreased. The authors conclude that, while money does not necessarily buy happiness, a lack of money is associated with unhappiness.

According to the results of the survey and study, the average household income in the United States in 2008 was $71,500, with a median income of $52,000. Ten percent of households reported a monthly income of less than $1000, but two-thirds of households had a monthly income of at least $3000. Approximately one-third of households were above the $75,000 threshold reported in the study, an income of $6250 per month.

The PNAS study is not the first study to correlate income and happiness.  A worldwide survey of income and happiness also reported that average life satisfaction is higher among nations with higher per capita national income. Each doubling of income was associated with a one-point increase in life satisfaction on a scale from 0 to 10. The effect was actually stronger among the richest nations in the world. Age and life expectancy were also factors in national life satisfaction, but income moderates these effects. People in North America reported the highest levels of life satisfaction, and people in Eastern Europe and sub-Saharan Africa reported dissatisfaction.

But, why the association? And the plateau? To some extent, money can buy necessities and comforts that lower income earners cannot afford, which may ease day-to-day stress. However, the authors of the current study hypothesize that, at some point, high income earners need to be working longer and harder to make more money, leaving less time for enjoying the rewards associated with extra cash reserves. A lot of questions are still unanswered about the real root of happiness, and money is likely not it at all. Happiness is subjective and influenced b y a myriad of internal and external factors that can likely never be measured by a single scale.

While money itself cannot purchase happiness, money does provide for circumstances that can reduce stress. Happiness is also influenced by age, education, health status, religious experience, race, gender, marital status, neighborhood, and family support. Happiness associated with money, however, is not owed to material items. Having more stuff does not make a person happier, but using money to provide for one’s family and community does provide satisfaction.


Barger SD, Donoho CJ, & Wayment HA (2009). The relative contributions of race/ethnicity, socioeconomic status, health, and social relationships to life satisfaction in the United States. Quality of life research : an international journal of quality of life aspects of treatment, care and rehabilitation, 18 (2), 179-89 PMID: 19082871

Deaton, A. (2008). Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll Journal of Economic Perspectives, 22 (2), 53-72 DOI: 10.1257/jep.22.2.53

Hagerty MR (2000). Social comparisons of income in one’s community: evidence from national surveys of income and happiness. Journal of personality and social psychology, 78 (4), 764-71 PMID: 10794379

Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being Proceedings of the National Academy of Sciences DOI: 10.1073/pnas.1011492107

Jennifer Gibson, PharmD

Jennifer Gibson, PharmD, is a practicing clinical pharmacist and medical writer/editor with experience in researching and preparing scientific publications, developing public relations materials, creating educational resources and presentations, and editing technical manuscripts. She is the owner of Excalibur Scientific, LLC.
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