Happiness happens at $75,000 per year, survey says

Friday, November 18th, 2011 By

A small yellow rose held in cupped hands.

What is happiness? $75,000 per year, Princeton researchers claim. (Photo Credit: CC BY/Hamed Saber/Flickr)

While a definitive answer to the question “What is happiness?” will forever remain elusive, doctors Angus Deaton and Daniel Kahneman of Princeton University have attempted to find happiness in numbers. Specifically, the doctor duo looked at responses to the Gallup-Healthways Well-Being Index (GHWBI) survey. They discovered that U.S. households with an average income of at least $75,000 scored highest for emotional well-being.

Analyzing personal happiness

The GHWBI survey asked roughly 1,000 U.S. residents a series of questions related to personal happiness. Deaton and Kahneman analyzed more than 450,000 responses from 2008 and 2009 and found that happiness results from the fulfillment of two psychological states: emotional well-being and life evaluation.

“What did we get from these data? Everything,” Deaton told reporters. “The GHWBI asks clear questions about life evaluation as well as emotional well-being. These data are just terrific in permitting research that was not really possible before.”

What are emotional well-being and life evaluation?

Though related, emotional well-being and life evaluation are separate concepts, said Kahneman.

“They have somewhat different determinants,” he said. “What improves people’s emotional well-being is different from what it takes to make them say that they’re satisfied with their life.”

Essentially, emotional well-being deals with present satisfaction, while life evaluation deals with reflection over the course of one’s life. As the doctors’ GHWBI research suggests, people tend to view their lives in terms of how successful they’ve been at achieving their goals, financial goals included.

Pay day loans can help people achieve financial goals.

Happiness, now for $75,000

While numerous social elements are involved in the happiness equation, the doctors’ research unearthed a peculiarity: a magic number. When households hit the $75,000 annual earnings mark average, their life evaluations rated most steady, and did not trend downward.

“Our finding indicates that $75,000 is the limit even in large expensive cities,” sayid Kahneman. “So, though there may be places in which happiness levels off at a lower income, $75,000 is the sufficiency point in the most expensive places.”

Curiously, study results indicate that incomes of more than $75,000 don’t correlated into greater happiness. Earning $75,000 translates into a Goldilocks-esque “just right.” Deaton and Kahneman believe this is because even in the most expensive cities, $75,000 is enough to live on while permitting emotionally enriching social experiences.

“No matter where you live, your emotional well-being is as good as it’s going to get at $75,000,” said Deaton, “and money’s not going to make it any better beyond that point. It’s like you hit some sort of ceiling, and you can’t get emotional well-being much higher just by having more money.”

Several factors were noted by the doctors in effort to explain the phenomenon, among them human beings’ ability to adapt; relative perceptions of wealth; stress of success compared with the stress of deprivation; quality of relationships; and individual temperament.

A story about living the good life

Sources

Gallup Management Journal

Newser

Time

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