Having more money might actually make people happier, according to a study of people’s income levels and their reported levels of happiness. People with higher incomes reported feeling more satisfied with their lives overall. For instance, 35% of respondents who reported making $35,000 US Dollars (USD) or less each year said they felt very happy, while all of the respondents making more than $500,000 USD reported the same. Previously, one of the widely accepted theories about money and happiness was the Easterlin paradox, a 1974 theory by economist Richard Easterlin, which stated that an average increase in income did not directly result in an average increase in happiness.
More about money and happiness:
- According to a 2010 theory by economist Daniel Kahneman, $75,000 USD per year is the cut-off point for feeling happy, and additional income beyond that has no effect.
- One study that gave participants money to spend either on themselves or on others found that those who spent the money on other people reporting feeling happier than those who spent it on themselves.
- A 2013 study found that Switzerland was the happiest country in the world, and its average net income was the second highest in the world.