Money cannot buy any happiness
The blanket claim that money cannot buy happiness is false, but so is the claim that more money always means more happiness. Research shows the relationship depends on baseline income, baseline happiness, and how money is spent.
What we know
A long-standing belief in psychology held that beyond roughly $75,000 per year in household income, additional money added little to emotional wellbeing. This figure came from a 2010 study by Nobel laureate Daniel Kahneman and Angus Deaton. A 2021 study by Matthew Killingsworth using continuous experience sampling with a much larger sample found a continuous positive relationship between income and happiness that extended beyond $200,000.
In 2023, Kahneman, Killingsworth, and a mediating researcher published a joint reanalysis in the Proceedings of the National Academy of Sciences that reconciled the earlier discrepancy. They found that the relationship is not one-size-fits-all. For people in the lower 15 percent of the happiness distribution, additional income above $100,000 produces little further improvement. For the happiest 30 percent of people, gains in happiness accelerate at incomes above $100,000. For the middle of the distribution, gains are approximately linear throughout the income range.
The practical takeaway is that money reliably reduces the suffering associated with poverty and that its effect on wellbeing varies with baseline happiness rather than disappearing at a fixed income threshold. How money is spent also matters: research on 'prosocial spending' shows that spending on others or on experiences produces more lasting wellbeing than spending on material goods.
Saying money 'cannot buy any happiness' is therefore clearly false, particularly for those in financial hardship. The saying that it 'cannot buy happiness' captures a grain of truth in that money alone is not sufficient for a flourishing life and that its returns diminish at higher income levels for those who are already unhappy.
Common claims
- Money makes no difference to happiness beyond a basic threshold.Mostly false. The 2023 joint reanalysis shows income continues to matter for most people.
- Earning more money always increases happiness proportionally.Partly false. The relationship flattens or reverses for the most unhappy people above $100k.
- How you spend money matters as much as how much you earn.Supported. Prosocial spending and experiential purchases show stronger wellbeing effects.