A new research has shown that contrary to previous influential research, money does influence an individual’s happiness. One potential reason leading to this conclusion could be that higher earners feel an increased sense of control over life.
The study which was published in the journal, Proceedings of National Academy of Sciences asked, what’s the relationship between money and well-being? “It’s one of the most studied questions in my field,” says Matthew Killingsworth, a senior fellow at Penn’s Wharton School who studies human happiness. To answer this question, Killingsworth collected 1.7 million data points from more than 33,000 participants who provided in-the-moment snapshots of their feelings during daily life.
In a paper in the Proceedings of the National Academy of Sciences, Killingsworth confirms that money does influence happiness and, contrary to previous influential research on the subject suggesting that this plateaus above $75,000 (Rs.54 lakh), there was no dollar value at which it stopped mattering to an individual’s well-being.
Most previous studies of the money-happiness link focused on evaluative well-being, which encompasses overall satisfaction with life. But for this study, Killingsworth aimed to capture both evaluative and experienced well-being, the latter indicating how people feel in the moment.
Through an app he created called Track Your Happiness, people recorded this a few times each day, with check-in times randomized per participant. To measure experienced well-being, each check-in asked them, “How do you feel right now?” on a scale ranging from “very bad” to “very good.” At least once during the process, participants also answered the question, “Overall, how satisfied are you with your life?” on a scale of “not at all” to “extremely.” This measured evaluative well-being.
Secondary measures of experienced well-being included 12 specific feelings, five positive (confident, good, inspired, interested, and proud) and seven negative (afraid, angry, bad, bored, sad, stressed, and upset). Secondary measures of evaluative well-being included two other measures of life satisfaction collected on an intake survey.
In part, he was trying to confirm the findings of a 2010 paper that suggested that as people earn more money their well-being increases, but experienced well-being plateaus once annual household income hits $75,000.
“It’s a compelling possibility, the idea that money stops mattering above that point, at least for how people actually feel moment to moment,” he says. “But when I looked across a wide range of income levels, I found that all forms of well-being continued to rise with income. I don’t see any sort of kink in the curve, an inflexion point where money stops mattering. Instead, it keeps increasing.”
Beyond that, Killingsworth’s work also provides a deeper understanding of the link between income and happiness. Higher earners are happier, in part, because of an increased sense of control over life, he says. “When you have more money, you have more choices about how to live your life. People living paycheck to paycheck who lose their job might need to take the first available job to stay afloat, even if it’s one they dislike. People with a financial cushion can wait for one that’s a better fit. Across decisions big and small, having more money gives a person more choices and a greater sense of autonomy.”
Though the study does show that income matters beyond a previously believed threshold, it might be best not to define success in monetary terms, he says. “Although money might be good for happiness, I found that people who equated money and success were less happy than those who didn’t