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Money can’t buy happiness, of course. Of course. But it can really, really help.
Here’s the deal: For years, there’s been a popular theory in behavioral science research that people hit a kind of “happiness plateau” around the $75,000 a year threshold (or around $100,000 adjusted for inflation), and above that level, more money isn’t going to make you significantly happier.
But according to new research from Matt Killingsworth, a senior fellow at the University of Pennsylvania’s Wharton School, there is an “ever-increasing association between more money and higher happiness.”
Or, to quote the old adage: Mo’ money, mo’ yacht trips to Mykonos with your best friends and personal chef.
In short, Killingsworth said that the income threshold idea wasn’t wrong, per se. But his research suggests that if such a level exists, “it is considerably higher than incomes of hundreds of thousands of dollars per year.”
So that’s it, we solved it: If you want to be happier, just quadruple your income … LOL jk. (I mean quadruple your income if you want to, but the happiness equation is, of course, a little more complicated than that.)
I called Dr. Killingsworth earlier this month to discuss his latest findings on the correlation between money and happiness, what the earlier science on the subject got wrong and why people need to focus on a “happiness portfolio.”
This interview has been edited for length and clarity.
Nightcap: Could you talk a bit about your research on happiness? Like, the layman’s version?
Killingsworth: At the broadest level, my research aims to understand what makes life worth living. Like, how do we understand the conditions of a good life; what makes people happy?
To do that, I collect large-scale data in the course of people’s everyday lives … That’s kind of the 100,000-foot view.
One of the things I’ve been looking at recently is this question of, is there a certain amount of money where, once you get to that, happiness stops changing? Is there sort of a threshold?
For a long time, researchers thought if people can get to that level — whether it’s $75,000, or $100,000 — then more doesn’t really seem to make a difference.
Nightcap: I’ve definitely heard of that one. I don’t think of myself as a particularly money-hungry person, but the idea always felt a little hard to believe. People with lots of money who don’t have to work sure look like they’re having a blast.
Killingsworth: Right. It looks like part of the reason researchers had found a sort of plateau was because of how they measured happiness. It was good for measuring happiness on the low end, but not above that. It’s kind of like how a dementia test measures whether people can do basic math or identify an animal. But a dementia test isn’t very good for differentiating the average person from a genius, because they’ll all get a perfect score.
A couple of papers I released in the last few years challenged that, and what I find with really high-quality data is that actually, happiness keeps rising.
Nightcap: I have a sort of cynical question. I wonder if part of the happiness for the very wealthy is that maybe their satisfaction comes from being so much further above the fray than everyone else? Like, if the floor were higher and there were fewer poor people in the world, would the rich still feel so much happier?
Killingsworth: I think it’s not impossible that what you’re describing is part of what’s going on. But I’m reasonably confident that that isn’t the whole story.
Statistically, what I find is the most explanatory factor is that when people have more money, they feel a lot more in control of their lives. And I think that’s the kind of thing that doesn’t really stop at any magic threshold. More money gives you more choices. The fewer resources you have, the more constrained you are, you don’t have so many options.
Nightcap: Can you talk a little bit about how geography makes a difference here? The US has a pretty weak social safety net, and I’m wondering how it might change the calculus if you had less money but weren’t living on a knife’s edge.
Killingsworth: My data is all from the US, so it doesn’t speak directly to what the pattern looks like in other countries. Certainly, I think it’s true that everywhere the happiness gradient is positive, it certainly makes sense that the gradient might be steeper in places where the stakes are higher. I totally share your intuition that the US in particular is an increasingly challenging place to be poor.
Nightcap: What do you think of the practical implications of your findings? Are we culturally reverting to a kind of Reagan-era greed?
Killingsworth: I would really want to be careful about that, for a few reasons.
Money is just one of a bunch of factors that explains why some people are happier than others. So even if more money really does cause people to be happier — my study is really just looking at the correlation between them all, though I think there’s a decent chance that that’s reflecting the causal structure — there’s tons of other stuff that’s also important.
A mistake that I think we should try to avoid is prioritizing money so much that we’re not doing all the other stuff that’s important.
I think people need to think about this more of kind of like a happiness portfolio.
There are other things that you can control, like spending more time with other people, getting into the gym more often or riding a bike, that are really pretty easy. Whereas, like, 5X-ing your income? That’s not so easy.
It’s more that you want to have the control, the freedom, the flexibility to be able to move through life. Making money is one way to do that. But there are other ways you can do it too, and one of them could just be by spending less.
Nightcap: So one last quick question: The secret to happiness. What is it?
Killingsworth: …I mean, I think part of the answer is, there’s no one thing. It’s actually a long list of things. I don’t know if I’m following your question correctly.
Nightcap: I’m just messing with you, sorry, it’s been a long week.
Killingsworth: You know, it’s the million-dollar question. It’s a little bit like asking, “What makes you healthy?” And you could say, well, washing your hands is good. But then, you know, eating vegetables is probably also good. And oh, by the way, getting some daily exercise, not living in an environment that’s really polluted, that would be good. Not having a job or family life that’s super stressful. And also, don’t be too lonely. … You can really build out a pretty long list before it starts feeling like well, OK, is the 71st thing really that important?
There isn’t one silver bullet — this one secret trick that the doctor is going to tell you is key. But it also means people kind of have options about how they pursue happiness.
