What’s the relationship between money and well-being? “It’s one of the most studied questions in my field,” says Matthew Killingsworth, a senior fellow at Penn’s Wharton School who studies human happiness. “I’m very curious about it. Other scientists are curious about it. Laypeople are curious about it. It’s something everyone is navigating all the time.”
To answer this query, Killingsworth collected 1.7 million money-happiness data points from over 33,000 participants that supplied in-the-moment snapshots of the feelings during everyday life. In a newspaper in the Proceedings of the National Academy of Sciences, Killingsworth affirms that money does influence happiness and, contrary to previous influential study on the subject suggesting this plateaus over $75,000, there was no dollar value at which it stopped mattering to an individual’s well-being.
Killingsworth conducts much of his work using a technique called experience sampling, which asks individuals to fill out short surveys at randomly selected times during their day. “It tells us what’s actually happening in people’s real lives as they live them, in millions of moments as they work and chat and eat and watch TV.”
Most previous studies of this money-happiness link focused on evaluative well-being, which encircles overall satisfaction with life. But for this particular study, Killingsworth planned to catch both evaluative and experienced well-being, the latter suggesting how people feel in the present time.
Through a program he created known as Track Your Happiness, people recorded this money-happiness data a few times each day, with check times randomized per participant. To measure experienced well-being, each check-in asked them, “How would you feel right now?” At least one time during the procedure, participants responded the question, “Overall, how satisfied are you with your life?” on a scale of “not at all” to “extremely.”
Secondary measures of experienced well-being included 12 specific feelings, five positive (confident, good, inspired, interested, and joyful ) and seven negative (fearful, angry, bad, exhausted, sad, stressed, and upset). Secondary steps of evaluative money-happiness well-being included two other measures of life satisfaction collected on an intake survey.
“This process provided repeated snapshots of people’s lives, which collectively gives us a composite image, a stop-motion movie of their lives,” he says. In total, 33,391 used, 18- to 65-year-olds from the United States provided 1,725,994 reports of experienced well-being. “Scientists often talk about trying to get a representative sample of the population,” he adds. “I was trying to get a representative sample of the moments of people’s lives.”
Killingsworth then calculated the average level of well-being of each person and examined its relationship to people’s income money-happiness. In part, he had been trying to confirm the findings of a 2010 paper that indicated that as people earn more money their well-being increases, but knowledgeable well-being plateaus once annual household income hits $75,000.
“It’s a compelling possibility, the idea that money stops mattering above that point, at least for how people actually feel moment to moment,” he says. “But when I looked across a wide range of income levels, I found that all forms of well-being continued to rise with income. I don’t see any sort of kink in the curve, an inflection point where money stops mattering. Instead, it keeps increasing.”
Here, “income” refers to a concept known as log (income); instead of each dollar mattering exactly the same to each individual, each dollar starts to issues less money-happiness the more a individual earns. “We would expect two people earning $25,000 and $50,000, respectively, to have the same difference in well-being as two people earning $100,000 and $200,000, respectively. In other words, proportional differences in income matter the same to everyone.”
Beyond that, Killingsworth’s work also provides a deeper understanding of the link between income and happiness.
Higher earners are happier, in part, due to an increased sense of control over life, he states. “Although money might be good for happiness, I found that people who equated money and success were less happy than those who didn’t. I also found that people who earned more money worked longer hours and felt more pressed for time.””When you have more money, you have more choices about how to live your life. You can likely see this in the pandemic. People living paycheck to paycheck who lose their job might need to take the first available job to stay afloat, even if it’s one they dislike. People with a financial cushion can wait for one that’s a better fit. Across decisions big and small, having more money gives a person more choices and a greater sense of autonomy.”
Yet it may be best not to define success in money-happiness terms, he says. “Although money might be good for happiness, I found that people who equated money and success were less happy than those who didn’t. I also found that people who earned more money worked longer hours and felt more pressed for time.”
Though the research does show that earnings matters beyond a previously believed threshold, Killingsworth also doesn’t want the takeaway to apply a notion that individuals should concentrate more on money. In fact, he found that, in actuality, income is only a small determinant of happiness.
“If anything, people probably overemphasize money when they think about how well their life is going,” says Killingsworth. “Yes, this is a factor that might matter in a way that we didn’t fully realize before, but it’s just one of many that people can control and ultimately, it’s not one I’m terribly concerned people are undervaluing.” Rather, he says he hopes this research can help move forward the conversation in an attempt to find what he calls the “equation for human happiness.”
Source: https://www.upenn.edu/