Another study taking on the age old question of whether more money really makes you happier comes down more or less on the side of a number of other studies in recent years: More money does make you happier up to a certain point, but once this point has been passed additional income does very little to to increase life enjoyment, stave off sadness, or reduce stress.
According to the research of economist Angus Deaton and psychologist Daniel Kahneman, in the United States that cut off point is $75,000 a year.
Beyond $75,000, money is important for life evaluation, but does nothing for happiness, enjoyment, sadness or stress. Both factors are important; it is good to have high emotional wellbeing, but it is also good to think your life is going well.
The study, published in Proceedings of the National Academy of Sciences, defines those factors thusly:
Emotional Wellbeing is "the quality of a person's everyday experience such as joy, fascination, anxiety, sadness, anger, and affection." Live evaluation is "a person's thoughts about his or her life (on a longer time scale)."
So, in other words, past that $75,000 threshold we think we are doing better in life, but we're not necessarily doing so when our emotional wellbeing is measured.
On that feeling that we are doing better with more income, the study found that life evaluation "steadily goes up with income."
Importantly, the same percentage increase in income has the same effect on evaluation for everyone, rich or poor alike even though the absolute dollar amounts differ. For example, a ten percent increase in income moves everyone up the same number of rungs [on the scale], so someone earning $20,000 a year who experiences a $2000 increase would move up the rung at the same rate as someone earning $100,000 a year who experiences a $10,000 increase.
The report also notes that below that $75,000 threshold, as income decreased,
...people reported decreasing happiness and increasing sadness and stress. The pain of life's misfortunes, including diseases, divorce, and being alone, is exacerbated by poverty. In other words, being divorced, being sick, and other painful experiences have worse effects on a poor person than on a rich.
As NPR points out, two thirds of US households make under $75,000 per year.