The study’s findings clearly indicate that, when it comes to money, there’s no such thing as a “happiness plateau.”
The fact that sayings often hit the nail on the head and prove to be a seemingly unfailing source of useful advice for life doesn’t mean that they’re infallible. Matthew Killingsworth, a Wharton School researcher at the University of Pennsylvania with a doctorate in Psychology from Harvard University, has just demonstrated this after recently publishing a peculiar study, both in form and, above all, substance. In it, Killingsworth basically states that whatever the sayings or the advocates of the philosophy of detachment may say, money can buy happiness.
What’s more, the more money, the greater the happiness.
A happiness scholar. It might not be the most conventional field of study, but Killingsworth studies the nature and causes of human happiness and its relationship to money. Throughout the years, he’s published several papers on the subject with leading scientists, including the late psychologist Daniel Kahneman. Now, he’s released a new paper that takes a broader and more curious perspective.
The study “Money and Happiness: Extended Evidence Against Satiation” hasn’t been peer-reviewed and has been self-published by Killingsworth. However, the work is gaining attention and publications such as The Guardian, Bloomberg, and Money have reported on it. This isn’t surprising, considering the two thought-provoking conclusions it presents. Firstly, it confirms a “positive association” between money and happiness. Secondly, it suggests that the more money a person has, the happier they’re likely to be. In essence, the study indicates that while having money may bring happiness, having a lot of money may lead to even greater happiness.
How can you study something like this? Killingsworth’s work builds on and completes other essays he had already developed on the subject. For his complex work, he relies on previous surveys and studies that take into account the income of the participants and their degree of “life satisfaction.” For example, one of his sources is a sample of 33,269 Americans with a household income of at least $10,000 per year who were asked to complete the Satisfaction With Life Scale.
His study covers an interesting range which, Killingsworth acknowledges, isn’t easy to access for research like his own: the wealthy. For his analysis, he included data from people with an average net worth of between $3 million and $7.9 million, according to The Guardian.
A matter of money. The relationship between money and happiness has been a well-documented topic. Several studies over the years have confirmed this connection, often with some variation. Killingsworth himself emphasized this link in a 2023 article co-authored with other scientists. Among other points, they noted that “Happiness increased steadily with income up to a threshold among happier people, and even accelerates in the happiest group.”
In his most recent paper, Killingsworth also points out a “positive association between money and happiness,” revealing clear disparities in levels of life satisfaction among people with low, medium, high, and very high incomes.
A “large and complex” question. “Are people with more money happier? The research literature on this question is large and complex, but virtually all research agrees that more money is associated with higher happiness to at least some degree,” Killingsworth says in his article.
“In recent research that included a substantial number of upper-income participants, I found that happiness rose steadily across the income range in a large U.S. sample. From low incomes up to people earning hundreds of thousand dollars per year, there was an approximately linear association between larger income and higher happiness,” he adds.
Is there a money-happiness threshold? That’s the million-dollar question, one that poses a challenge and one that Killingsworth had already tried to answer in previous works. Assuming there’s a direct association between wealth and happiness, is there a point at which having more money stops making people happier? This has previously been referred to as a “happiness plateau.”
“Might people earning $400,000/y or $500,000/y, for example, have reached a point beyond which more money is no longer associated with greater happiness?” Killingsworth asks. The question is very pertinent because in the past, he had already largely dismantled the idea that there’s an income threshold at which the increase in happiness stabilizes, a concept that in 2010 was set at $75,000 per year.
Now, Killingsworth wanted to go further and clarify whether even in the most affluent layers of society there are differences: Do very rich people show higher levels of happiness than simply rich people? “Despite the sizable literature on the topic of money and happiness, I know of no studies that compare people earning something like $500,000/y to those earning much more, drawing a figurative question mark over the upper end of the economic distribution,” he says in his latest study.
So what did he find? In short, the more money, the better. This applies not only to people with a good income compared to those with a modest income, but also to millionaires and those with very comfortable finances. In other words, “the positive association between money and happiness continues far up the economic ladder, and that the magnitude of the differences can be substantial.”
Killingsworth’s study also provides specific insights into this phenomenon, as Bloomberg reports. When asked to rate their life satisfaction, the wealthiest individuals, with millions or billions in wealth, gave an average score of between 5.5 and 6 out of 7. This score is much higher than the 4.6 given by those earning around $100,000 a year, and significantly higher than the 4.14 for people earning between $15,000 and $30,000 a year.
Looking closely at the details. These “notes” not only reveal significant differences in happiness between the wealthiest and middle-income groups, but they also provide even more insightful information. It seems that the happiness gap is actually growing between the wealthiest individuals and those with average incomes. According to Killingsworth, “the difference in life satisfaction between the wealthy and those with incomes of $70-80,000/y was nearly three times as large as the difference between $70-80,000/y and the average of the two lowest income groups.”
“The results show a sizable upward trend, with wealthy individuals being substantially and statistically significantly happier than people earning over $500,000/y,” he adds.
Some nuances. Killingsworth’s conclusions are clear, but the proverb “money isn't everything” holds true due to the complexities of happiness. While there’s a definite link between wealth and life satisfaction, happiness is influenced by many other factors. As he mentioned to The Guardian, “Money is just one of many things that matters for happiness, and a small difference in income tends to be associated with pretty small differences in happiness. But if the differences in income/wealth are very large, the differences in happiness can be, too.” Why? Freedom.
“A greater feeling of control over life can explain about 75% of the association between money and happiness. So I think a big part of what’s happening is that, when people have more money, they have more control over their lives. More freedom to live the life they want to live,” Killingsworth adds. “Money… is just one small part of the overall equation for happiness. So part of the reason I study happiness is to broaden our horizons beyond things like money.”
This article was written by Carlos Prego and originally published in Spanish on Xataka.
Image | Vitaley Gariev via Unsplash
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