The old adage that cash can’t buy happiness may finally should be put to rest.
A broad body of research has long shown that cash and happiness are closely related, though it was largely believed that when someone earns enough money to afford a modest, comfortable life — often around $75,000 — the happiness profit trails off.
Nonetheless, this “happiness plateau,” as researchers call it, might be nothing greater than a convenient myth. In keeping with a latest study by Matthew Killingsworth, a senior Wharton School fellow on the University of Pennsylvania, the ultra-rich are far happier than people earning $500,000 a 12 months, who’re themselves notably happier than low- and middle-income earners.
Like with income itself, Killingsworth found that there’s a big gap in happiness between high- and low-income Americans.
“The difference in happiness between the highest and bottom of the economic distribution was also quite large, contrary to the notion that cash is just related to small differences in happiness,” he wrote on his website. “The magnitude of the differences might be substantial.”
More cash, more happiness?
While more cash could have meant more problems for the late hip hop icon Notorious B.I.G., for many Americans, it means more happiness.
For years now, Killingsworth has been chipping away at the thought of the happiness plateau. In 2023, he was a lead researcher on a widely publicized study that found earnings of as much as $500,000 per 12 months indeed increased one’s reported levels of happiness.
That isn’t to suggest people stopped getting happier in the event that they earned greater than that quantity. Slightly, it was a limitation of fine data on people wealthier than that. That’s where his latest study comes into play. It’s mostly a continuation of the one released last 12 months, now updated with the happiness levels of millionaires and billionaires.
What the brand new study finds is that these ultra-rich persons are, in reality, far more completely happy than individuals with modest incomes within the $70,000 to $80,000 range — the extent historically related to the happiness plateau.
Previous research analyzed a limited range of incomes, Killingsworth said, making it difficult to find out the money-to-happiness ratio for people at the highest of the income distribution.
Many of us then filled within the blank with the concept that “all and sundry simply must get ‘enough’ and might then rationally shift all their attention to things beside money,” he said. One other common theory suggests that the trimmings of high society and its keeping-up-with-the-Joneses mentality actually made wealthy people less completely happy.
“The simplicity this means could also be one reason why the thought of a plateau is so attractive,” he added.
But the truth is just that many previous studies that tracked income and happiness didn’t have great data on the wealthy. And the rationale for that, at the very least, is apparent.
“Perhaps wealthy persons are disinclined to spend their free time taking surveys,” he said.
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