Does Money Buy Happiness? Actually, Yes

Accepted Myths Debunked

• Common misconceptions include:
  • Great Wall of China is the only man-made object visible from space
  • Lemmings engage in mass suicide
  • Heat escapes mostly from the head
  • We use only 10% of our brains
• The belief that money increases happiness only up to $75,000 is a myth.

The $75,000 Study

• Researchers: Daniel Kahneman, Angus Deaton (2010)
• Findings:
  • Happiness increases with income only up to $75,000
  • Life satisfaction continues to increase with income
• Theory: Basic needs cause stress; above $75,000, happiness depends on relationships, health, and leisure time.

The Killingsworth Study

• Author: Matthew Killingsworth (2021)
• Method: Real-time experience sampling of 34,000 volunteers
• Results:
  • Larger incomes associated with greater happiness and life satisfaction
  • No plateau in happiness at $75,000

Collaborative Paper (2023)

• Authors: Kahneman, Killingsworth, Barbara Mellers
• Findings:
  • More money = more happiness for 80% of people
  • Least happy 20% plateau at $100,000
• Conclusion: Money affects happiness differently based on emotional well-being

Why Money Increases Happiness

• Avoids stress and difficulties associated with lack of money
• Provides a sense of abundance
• Offers more choices, freedom, and control
• Can enhance happiness if spent on experiences, helping others, etc.

Caveats and Considerations

• Correlation between money and happiness is slight
• Diminishing returns on happiness with increased income
• Happiness influenced by genetics, health, relationships, leisure, purpose
• Paradoxical effects: seeking money decreases life satisfaction
• Happiness correlation with income is based on logarithmic income

Conclusion

• Income affects happiness but is not the sole determinant
• Important factors: genetics, health, relationships, purpose
• Happiness should not be sought solely through financial success
• Wise use of money can enhance life satisfaction and well-being