Study Finds Everyday Happiness Levels Off After $75,000

September 8, 2010

Close up of man holding hundred dollar billsMoney may not buy you day-to-day happiness, but it can increase overall satisfaction with your life. According to The Wall Street Journal, a recent study found that people's life evaluations rose steadily with income, but emotional well being--or day-to-day happiness--plateaued at $75,000 a year.

Researchers analyzed data from 450,000 Americans surveyed in 2008 and 2009 by the Gallup Organization and the Healthways Corporation to see how income affected emotional well being--a person's everyday experience such as joy, sadness or anger--and life evaluation--a person's assessment of his or her life on a longer time scale.

According to HealthDay, happiness increased as annual household income went up, but income beyond $75,000 seemed to have no effect on day-to-day contentment. However, although emotional well being leveled off, respondents who earned more than $75,000 reported that they were more satisfied overall with their life.

"It's really important to recognize that the word 'happiness' covers a lot of ground," said Angus Deaton, author of the study and professor of economics and international affairs at Princeton University. "Higher income doesn't seem to have any effect on well-being after around $75,000, whereas your evaluation of your life keeps going up along with income." CNN reported that psychologist Daniel Kahneman speculated this may happen because people with more money can buy more things, but may "savor each pleasure less".

James Maddux, a psychology professor at George Mason University, told HealthDay that the study is consistent with previous research on income and happiness. Maddux also added that the findings hold true in other countries. Once per capita GDP rises so that people are not struggling to meet basic needs--food, clothing, shelter and healthcare--additional increases in national wealth do not seem to make a difference, he said.

Conversely, CNN pointed out that less money exacerbated negative life events such as divorce and stress. HealthDay added that people who made less also got less of a "happiness boost" from weekends compared to those who were better-off.

Maddux cautioned people not to "get too hung up on the $75,000 figure" as income level can mean different things depending on the size of one's family or where someone lives--for instance, The Wall Street Journal pointed out that in high-cost cities such as New York, Los Angeles and San Francisco, the $75,000 cutoff may not be enough. Maddux told HealthDay, "$75,000 is not a magical figure people need to achieve to be at their happiest. The point is there is a threshold at which people probably are not going to be substantially happier if they keep making more money."

Compiled by Heidi M. Agustin


"After $75,000, Money Can't Buy Day-to-Day Happiness," healthday.com, September 6, 2010, Jenifer Goodwin

"High income improves evaluation of life but not emotional well-being," pnas.org, September 7, 2010, Daniel Kahneman and Angus Deaton

"More on money (not) buying happiness," CNN.com, September 6, 2010

"The Perfect Salary for Happiness: $75,000," online.wsj.com, September 7, 2010, Robert Frank

Career and Education News

Our News Writers and Editors

CityTownInfo Writers and Editors

Follow CityTownInfo.com

Follow Us on Facebook
Follow Us on Twitter
Follow Us on Youtube

Career and College Resources on CityTownInfo

Real-World Career Reports

Career Stories from workers: daily activities, job tips, best/worst job aspects, training, etc.
Daily Career & Education News from our staff. We're an approved Google News provider!

Career References and Original Articles

Resource Center. A starting point for all CityTownInfo career and college resources.
Career Overviews of hundreds of careers: descriptions, salaries, forecasts, schools, more.
Best Careers Not Requiring Degrees: Good pay, job growth, low need for degrees.
Helpful Articles, many in "how-to" format; e.g., "How to Become a Chef".
Infographics covering employment and educational trends.

College Directories and Lists

These lists link to thousands of detailed school profiles.

Colleges by State. Nearly every college and trade school in the country.
Colleges Listed Alphabetically. About 7,000 colleges & trade schools, including online schools.
Colleges by Major City. Browse cities with multiple college options.
Online Colleges. Colleges with online degree programs.
Graduate Schools by State. Colleges offering graduate degree programs.
Graduate Schools by Major City. Find cities with multiple graduate school options.