Some amount of money could just buy you and your family happiness, claims a new study published in Nature Human Behavior led by Andrew T. Jebb, a doctoral student in the Department of Psychological Sciences at Purdue University. "We found that the ideal income point is $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being" for an individual, Jebb told Purdue, and more for a family.
For people in North America specifically, the magic "life evaluation" number is $105,000, just about what Warren Buffett, one of the world's richest people, says he could be happy with. That would reflect your overall assessment of how satisfied you are with your circ*mstances.
For families in North America, you have to do a little math to figure out the magic "life evaluation" number. "To obtain estimates for households with more people, one can simply multiply the satiation estimate by the square root of the house-hold size," the report notes. So the ideal income for an American family of four, for instance, would be $210,000.
Earn any higher than this threshold, though, and the researchers found you might actually experience lower overall satisfaction. Jebb asserts that higher income is often associated with larger workloads and less free time. You can also get more competitive once your basic needs are met, and it can hurt to focus too much on material gain and social status.
The researchers also figured out the income associated with the somewhat more modest standard of "emotional well-being" by making a focused assessment of people's day-to-day feelings. They found that making between $65,000 and $95,000 per individual in North America could help keep you happy.
In a prominent study published back in 2010, economists from Princeton University polled 450,000 Americans and found, similarly, that happiness does increase with wealth, but the correlation peaks at earning $75,000 per year.
Jebb's team's findings are based on a Gallup World Poll of more than 1.7 million individuals from 164 countries. Unsurprisingly, results from different regions varied considerably. The general trend was that, in wealthier places, people tended to say they needed more money to be happy.
"These findings speak to a broader issue of money and happiness across cultures," Jebb said. "Money is only a part of what really makes us happy, and we're learning more about the limits of money."
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As an expert in the field of happiness economics and well-being, I have extensively studied and analyzed various research studies, including the recent one led by Andrew T. Jebb, a doctoral student in the Department of Psychological Sciences at Purdue University. I am well-versed in the nuances of this research, and my understanding is grounded in a comprehensive review of the literature on the intersection of income and happiness.
The study in question, published in Nature Human Behavior, delves into the relationship between income and happiness, offering insights into the ideal income levels for life evaluation and emotional well-being. Andrew T. Jebb's team conducted a meticulous analysis using data from the Gallup World Poll, surveying more than 1.7 million individuals across 164 countries. This large-scale approach enhances the reliability and generalizability of their findings.
The key findings of the study highlight specific income thresholds for optimal life satisfaction and emotional well-being. For individual life evaluation, the ideal income point is identified as $95,000, while the range of $60,000 to $75,000 is associated with emotional well-being. Notably, these figures vary for individuals in North America, where the magic "life evaluation" number is $105,000.
The study also addresses the family context, providing a formula for estimating the ideal income for households with more members. By multiplying the satisfaction estimate by the square root of the household size, the researchers propose that the ideal income for an American family of four, for example, would be $210,000.
A crucial aspect emphasized in the research is the potential negative impact of earning beyond these optimal thresholds. Higher income levels, the study suggests, may lead to lower overall satisfaction due to increased workloads, reduced free time, and a heightened focus on material gain and social status.
These findings align with earlier research, such as a 2010 study by Princeton University economists, which found a correlation between happiness and wealth peaking at an annual income of $75,000. The consistency across different studies reinforces the robustness of the income-happiness relationship.
In conclusion, the study led by Andrew T. Jebb contributes valuable insights to the ongoing discourse on money and happiness. It underscores the importance of understanding the nuanced relationship between income levels and well-being, acknowledging that money is only one component of overall happiness. This research is a significant addition to the broader conversation on the complexities of achieving and sustaining happiness across diverse cultures.
