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January 18, 2011

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Money CAN buy happiness, within limits: study

Sept. 8, 2010
Courtesy of PNAS
and World Science staff

Mon­ey can buy hap­pi­ness, but with­in lim­its, a study sug­gests. 

Peo­ple asked to rate their own eve­ry­day “e­mo­tional ex­pe­ri­ences” give high­er rat­ings the high­er their in­come is, up to an av­er­age of about $75,000 a year, ac­cord­ing to Prince­ton Uni­vers­ity re­search­ers Dan­iel Kah­ne­man and An­gus Deaton.

Above that amount, these rat­ings lev­els off, though even then, peo­ple con­tin­ue eval­u­at­ing their own life in gen­er­al more highly as their earn­ings in­crease.

Kah­ne­man and Deaton an­a­lyzed over 450,000 re­sponses to a daily sur­vey of 1,000 ran­domly se­lected U.S. res­i­dents. Life evalua­t­ions were meas­ured by ask­ing re­spon­dents to rate their lives on a scale of ze­ro to 10, while emo­tion­al well-be­ing was meas­ured ac­cord­ing to re­spon­dents’ ex­pe­ri­ences of cer­tain pos­i­tive and neg­a­tive emo­tions the pre­vi­ous day. 

As in­come de­creased from $75,000, re­spon­dents re­ported de­creas­ing hap­pi­ness and in­creas­ing sad­ness and stress, ac­cord­ing to the in­ves­ti­ga­tors, whose find­ings ap­pear in this week’s early on­line edi­tion of the re­search jour­nal Pro­ceed­ings of the Na­tio­n­al Aca­de­my of Sci­en­ces. 

The da­ta al­so sug­gested that po­verty ex­ac­er­bat­es the emo­tion­al pain of un­for­tu­nate events or cir­cum­stances, in­clud­ing dis­ease, di­vorce, and lone­li­ness, the au­thors added. 

The study does­n’t imply that peo­ple’s lives won’t im­prove af­ter a raise in an­nu­al in­come from $100,000 to $150,000, they said, but it sug­gests that above a cer­tain in­come, peo­ple’s emo­tion­al well-be­ing is con­strained by oth­er fac­tors, such as tem­per­a­ment and life cir­cum­stances.

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Money can buy happiness, but within limits, a study suggests. People asked to rate their own everyday “emotional experiences” give higher ratings the higher their income is, up to an average of about $75,000 a year, according to Princeton University researchers Daniel Kahneman and Angus Deaton. After that amount, these ratings levels off, though even over that income, people continue evaluating their own life in general more highly as their earnings increase. Kahneman and Deaton analyzed over 450,000 responses to a daily survey of 1000 randomly selected U.S. residents. Life evaluations were measured by asking respondents to rate their lives on a scale of zero to 10, while emotional well-being was measured according to respondents’ experiences of certain positive and negative emotions the previous day. As income decreased from $75,000, respondents reported decreasing happiness and increasing sadness and stress, according to the investigators, whose findings appear in this week’s early online edition of the research journal pnas. The data also suggested that the emotional pain of unfortunate events or circumstances, including disease, divorce, and being alone, is exacerbated by poverty, the authors added. The study doesn’t imply that people’s lives will not improve after a raise in annual income from $100,000 to $150,000, they said, but it suggests that above a certain income, people’s emotional well-being is constrained by other factors, such as temperament and life circumstances.