We’ve all heard the phrase: “Money can’t buy happiness.” But is it true?
A new study from Purdue University published in “Nature Human Behavior” says it actually may be able to, but only to a certain extent.
The study draws on data from the Gallup World Poll, which contains observations collected from over 1.7 million people in single-person households from 164 counties.
“That might be surprising as what we see on TV and what advertisers tell us we need would indicate that there is no ceiling when it comes to how much money is needed for happiness, but we now see there are some thresholds,” said Andrew T. Jebb, the lead author and doctoral student in the Department of Psychological Sciences. “It’s been debated at what point does money no longer change your level of well-being. We found that the ideal income point is $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being. Again, this amount is for individuals and would likely be higher for families.”
The study found that $105,000 is the ideal amount of income for those in the Northern America region for life satisfaction. Meanwhile, on the lower end, it’s $35,000 for those living in the Caribbean and Latin America.
And earning past the ideal amount of income in each country tended to coincide with lower levels of happiness and well-being, the study says. That could be because of reduced life satisfaction or even desires to pursue more material gains and engaging in social comparisons, the study says.
“At this point they are asking themselves, ‘Overall, how am I doing?’ and ‘How do I compare to other people?’” Jebb said. “The small decline puts one’s level of well-being closer to individuals who make slightly lower incomes, perhaps due to the costs that come with the highest incomes. These findings speak to a broader issue of money and happiness across cultures. Money is only a part of what really makes us happy, and we’re learning more about the limits of money.”
For much more on the study, click here.