More money still buys happiness, even in America
Happiness shows no plateau with income, it just gets more expensive to buy.
Astral Codex Ten · Contra Pritchard On Liberal HappinessEven at American incomes, more money still buys more happiness, with no clear ceiling.
Across countries, higher average income goes with higher average happiness, not just richer people outranking their neighbors within one country. Researchers who study well-being, including psychologist and Nobel economics laureate Daniel Kahneman alongside researchers Matthew Killingsworth and Barbara Mellers, find no sign the link flattens out near current American levels.
The catch is cost. Happiness rises with the logarithm of income, so each extra point on the happiness scale takes a much larger raise than the last. Doubling pay buys about the same happiness gain each time, which is why progress gets slower even as it continues. In principle, higher pay could keep lifting reported happiness without hitting a limit.
Questions people ask
Didn't scientists used to say happiness stopped rising after about $75,000?
Yes. A well-known 2010 study found that day-to-day emotional well-being leveled off around $75,000 a year. Later work by happiness researcher Matthew Killingsworth found continued gains, and joint work with psychologist Daniel Kahneman and researcher Barbara Mellers concluded that happiness keeps rising well beyond that level.
Does this mean giving me a raise will make me happier?
On average, yes. The finding is about averages across many people, so a raise tends to nudge reported happiness upward. Health, relationships, and security still shape any one person's happiness far more than a single paycheck.
Why does it take more and more money for the same happiness boost?
It reflects diminishing returns: happiness rises with the logarithm of income. As an illustration of that pattern, doubling income from $20,000 to $40,000 would matter about as much as doubling it from $100,000 to $200,000. So at high incomes, each extra point of happiness requires ever larger dollar gains.