Story at a glance
- Previous research suggested well-being tends to go up with income but hits a ceiling of around $75,000 ($108,000 in today’s dollars).
- But new research shows millionaires and billionaires are “substantially and statistically significantly happier” than even those making over $500,000 a year.
- The new paper doesn’t address causation — whether money itself is the primary driver or other benefits that come with having more money.
(NewsNation) — When it comes to happiness, it turns out more money is better.
New research shows millionaires and billionaires are “substantially and statistically significantly happier” than even those making over $500,000 a year.
The findings, from Wharton senior fellow Matt Killingsworth, suggest the positive association between money and happiness continues far up the economic ladder, disputing previous studies that found money only buys happiness up to a certain level.
“The difference between wealthy and middle-income participants was nearly three times larger than the difference between the middle and low-income participants, contrary to the idea that middle-income people are close to the peak of the money-happiness curve,” Killingsworth wrote.
The analysis is the latest research challenging a famous 2010 paper by psychologist Daniel Kahneman and economist Angus Deaton, which found well-being tends to go up with income but hits a ceiling of around $75,000 ($108,000 in today’s dollars).
Last year, Kahneman and Killingsworth reanalyzed that work and found, on average, money does appear to boost happiness up to at least $500,000 a year. Killingsworth’s new research suggests the trend extends even further to the ultrawealthy.
Those with a net worth in the millions or billions reported an average life satisfaction rating between 5.5 and 6 on a 7-point scale. By comparison, those earning $100,000 came in just over 4.5, and those earning about $15,000 to $30,000 a year were just above 4.
“This sizable difference offers a counterpoint to the frequent claim that money is only associated with small differences in well-being,” Killingsworth wrote.
Although it now seems clear having more money is linked to higher levels of happiness, the paper doesn’t address causation — whether money itself is the primary driver or other benefits that come with having more money.
Previous research has shown the relationship between happiness and income can also vary from person to person. For example, Kahneman and Killingsworth’s 2023 study noted that the unhappiest 15% saw their happiness rise with additional income but only until $100,000.
“It remains possible that some threshold exists beyond which more money is no longer associated with greater happiness. But if one does exist, these results suggest that it is considerably higher than incomes of hundreds of thousands of dollars per year,” Killingsworth concluded.
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