Wharton’s Matt Killingsworth has discovered something that might make your wallet (and your heart) a little lighter. Happiness apparently keeps climbing alongside your income, smashing through previous expectations like a caffeinated stock market. Who knew money could buy smiles and surprises?
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While there is plenty of research on money and happiness, most studies have not looked at people earning high incomes. As a result, researchers have been left wondering if there is a point beyond which money stops mattering for happiness.
Killingsworth’s study, “Money and Happiness: Extended Evidence Against Satiation,” breaks new ground by comparing the happiness levels of a large US group with a wide range of incomes, to two groups of ultra-wealthy individuals. According to him, it could be the most expansive look at money and happiness at the upper end of the economic distribution.
“Research shows that richer people tend to be happier, but we do not really know how far that association extends,” he said. “Few studies include people with high incomes, and almost none include people who are genuinely rich, so it is hard to tell if happiness plateaus beyond some modest level of income or wealth. The answer could be important for decisions around salaries, taxes, and financial planning.”
For his study, Killingsworth looked at more than 33,000 working adults in the US who reported both their life satisfaction and income. He then compared their responses to two groups of wealthy individuals from previous studies, one group of millionaires from around the world and another made up of people from the Forbes 400 list, the wealthiest Americans.
The findings are striking. Wealthy people are significantly happier than the highest earners in the ordinary income group, when comparing their levels of life satisfaction. While the study does not prove that money causes happiness, it adds to growing evidence that the two are closely linked.
“This shows that the connection between money and happiness keeps growing, even well past incomes of hundreds of thousands a year,” Killingsworth explained. “The difference is big enough to be quite meaningful.”