Money can really buy you happiness, especially if you’re a billionaire

Researchers find that a correlation between money and happiness extended to people making at least $500,000 a year

Research finds money can buy you happiness, with those earning higher incomes reporting higher levels of life satisfaction ( Getty Images/iStockphoto ) (Getty Images/iStockphoto)

A new study shows that money can buy happiness, contradicting years of the upper-class claiming the opposite.

Recent findings published by Wharton School happiness researcher Matthew Killingsworth indicate that millionaires and billionaires are happier than those earning up to $500,000 a year. The research directly contradicts the hedonic treadmill theory, which suggests that no matter how much wealth you obtain, people adjust to normal levels of happiness and the the joys money can buy aren’t as novel when you reach a certain wealth threshold.

However, happiness appears to not plateau the more money you make. In fact, Killingsworth found a correlation between an increase in emotional well-being and income among millionaires and billionaires, pointing to higher rates of happiness. “The results suggest that the positive association between money and well-being continues far up the economic ladder,” he explained to Bloomberg.

Before publishing the study, Killingsworth was a member of a team of scientists dedicated to challenging the notion that one can’t buy happiness. He worked alongside the late Nobel Prize-winning economist and psychologist Daniel Kahneman, who notoriously challenged the findings in his famed 2010 paper with economist Angus Deaton. At the time, Kahneman and Deaton claimed happiness increased with incomes until about $60,000 to $90,000 a year, at which it plateaued. Killingsworth worked with Kahneman and a team of fellow scientists to continue to debunk the claims of the 2010 paper.

Together, Kahneman and Killingsworth found the correlation between money and happiness extended to people making at least $500,000 a year, by gauging participants’ daily happiness levels via a smartphone app developed by Killingsworth called Track Your Happiness. In an interview with the Washington Post, Killingsworth noted that the real-time input of the data allowed for more authentic results by “repeatedly pinging people at randomly-timed moments during daily life, and asking about their happiness at that moment in real-time.”

After Kahneman’s passing, Killingsworth published their work with additional evidence indicating that those with a net worth in the millions or billions reported average life satisfaction.

By combining data used in his earlier research - as well as results from a 2018 study of 4,000 people with a median wealth of $3 million to $8 million from 17 countries, and a 1985 survey of the Forbes list of wealthiest Americans - Killingsworth was able to determine the correlation between increased wealth and higher levels of happiness.

Those earning around $500,000 or above reported an average life satisfaction of 5.5 and six out of seven, while those earning around $100,000 a year reported a rating of about 4.6. Those earning about $15,000 to $30,000 a year reported slightly above a four.

“The magnitude of the difference between the low and high end of incomes is gigantic,” Killingsworth stressed, noting that this indicated a marked divide in happiness levels between middle and upper-class people. “Within the bounds of what money can explain, a huge amount of that difference occurs above the median income.”

While happiness cannot be bought, Killingsworth’s study shows that money can contribute to important needs being met - like proper food, shelter, and stability. Although money is a significant factor in an individual’s overall contentment, in the happiness researcher’s previous study conducted with Kahneman, there was a minority of wealthy people who found dissatisfaction amid increasing income.

“In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness,” Killingsworth told the Washington Post at the time. “The exception is people who are financially well-off but unhappy. For instance, if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees.”

This “unhappy minority” amounted to 20 percent of participants, whose unhappiness reportedly “diminishes with rising income up to a threshold, then shows no further progress.” However, these participants reported feelings associated with pre-existing issues that did not correlate with their income, including heartbreak, bereavement, or clinical depression. Their “suffering” decreased slightly as their income rose to about $100,000, but not marginally more beyond that.