Buzz
The age-old debate over whether "money can't buy happiness" has been ongoing for centuries, yet the answer still eludes us. Some studies suggest money can bring happiness, but only up to $75,000 annually (circa 2010). Others argue that it does, provided you spend it to buy time—such as hiring housekeeping help—or to acquire goods that resonate with your personality. Now, Purdue University psychologists are adding their voice to the conversation with a new study on money and life satisfaction, concluding that people feel most fulfilled when earning $95,000 annually (per person, not per household).
This study, published earlier this year in Nature Human Behavior, analyzed data from the Gallup World Poll, which surveyed participants from 164 countries. Its goal was to pinpoint the "income satiation" level, the threshold beyond which more money no longer boosts happiness. The study assessed responses related to life evaluation (how people rate their lives from the worst to the best possible) and emotional well-being (how people felt the previous day).
The researchers found that the maximum point at which money ceases to bring greater life satisfaction was $95,000, on average. Beyond that, subjective well-being actually began to decrease as income rose. (Just as Biggie warned us.) However, emotional satisfaction appeared to be achieved at a lower price—positive emotions were linked to increased income up to $60,000, and negative emotions lessened as salaries grew, up to $75,000.
Of course, location plays a significant role. A $95,000 salary will offer a different lifestyle in Thailand compared to Sweden. In Western Europe and Scandinavia, the point at which money starts to cause more problems is $100,000, while in North America, it's $105,000. Australia and New Zealand had the highest threshold, at $125,000, while Latin America and the Caribbean had the lowest, at $40,000.
The results also varied depending on educational background, likely due to differing income expectations and social comparisons that arise, for example, between someone with a law degree versus someone with an associate's degree.
That being said, making comparisons at the highest income levels was challenging due to limited data. For instance, the survey included only 99 participants from Sub-Saharan Africa earning over $100,000, and only 1,311 people from Western Europe and Scandinavia with incomes above $200,000. Additionally, the study couldn't account for the varying costs of living within regions—someone renting in New York City and someone renting in Fort Lauderdale likely have very different views on what constitutes an ideal salary.
In short, this study adds to the growing body of evidence that money does, in fact, influence happiness, but only to a certain extent. Given the limitations of happiness studies like this one, we may never pinpoint exactly where that limit lies.
