How much money can bring happiness?

How much money can bring happiness?

As long as you earn less than five tons a year, high income brings more happiness. Unless you are really unhappy. Then it stops after a ton.

Dan Palleger

The American Country Singer Sings: “I’m Not Rich, But I Love Being” Chris Johnson. They say money can’t buy happiness. maybe. But a boat and a truck to pull him forward.

Money alone does not make you happy, but it is certainly easier to be happy with money than without it. Unless you are an ascetic like Diogenes. When Alexander the Great visited the Greek philosopher, he found him sitting in front of the barrel in which he lived. Alexander offered to grant him a wish. Diogenes did not ask for money, only that the mighty ruler could step aside because he was standing in the sunlight.

About the author

Dan Pallegier is an economics reporter. He writes about financial markets and central banks, among other things. in interest capital It delves into exciting and fascinating economic events.

However, more money is better for most people. Even if that lost its meaning from a certain level. I once heard that Jürgen Klinsmann could make millions at the end of his career by playing football in China, but the highly capable German striker wanted nothing to do with it. He already had enough money. “I can eat one steak a day, right?” It’s a very good death check.

The exact point at which extra money does not bring more happiness is a tricky question. Undoubtedly, there are people for whom there should always be more, as the Greek philosopher Epicurus (a contemporary of Diogenes) said: “Nothing is enough for those who lack enough.”

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What is the order of “enough” amount for January 10 modal? According to new American research, the limit is income Not less than 500 thousand dollars per year (€475,000), well above the $75,000 paid in 2010 Another study was established.

Remarkably, both studies were conducted by the same author: Daniel Kahneman. Two years ago, the psychologist and 2002 Nobel Laureate in Economics study Under the Eyes of PhD Student Matthew Killingsworth. He concluded that there is no point at all at which money stops contributing to more happiness.

Kahneman and Killingsworth joined forces and re-examined the survey data, which yielded some impressive results.

It turns out that for happy people, more money continues to contribute to more happiness. At least $500,000 per year (none of the Americans surveyed had incomes higher than that). So it is possible that over this amount there is a point where the extra money does not bring greater happiness.

With unhappy people, it seems that from a certain income level (about $100,000) no additional happiness is added. “For the very poor it obviously makes a difference if they have more money,” Killingsworth told the British weekly. new world. “But if you are still miserable despite a decent income, the source of that misery may not be something money can fix.”

One element not addressed in this analysis is the importance of relative wealth for happiness. “No man is an island alone”, in words English poet John Donne. People relate to others, and often measure themselves against that. So income is also a relative factor.

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Economists immediately think of Easter paradox. American economist Richard Easterlin demonstrated nearly fifty years ago that the rich in society are usually happier than the poor. But if society as a whole becomes richer, it will not become happier. Easterlin concluded that it is not money, but the feeling that we are richer than our neighbors that makes us happy.

Many experiments have been done to test this. one of The most famous Dating back in 1998, it asked participants which hypothetical outcome they preferred:

a) An annual income of $50,000, while others in the community earn $25,000.

b) Annual income of $100,000 and others $200,000 (prices of goods and services are the same in both scenarios).

If only the purchasing power of money were decisive, everyone would choose a higher absolute income (b). However, half of the participants chose option A, because a higher relative income was more important to them.

In other words: they would rather float in a rowing boat between kayaks than in a speedboat between yachts.

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