Money cannot buy any happiness
Whether money buys happiness depends heavily on how the question is framed. Research shows higher income is associated with greater life satisfaction and emotional well-being, generally without the sharp plateau once widely cited around 75,000 dollars, though the relationship's strength and shape vary across studies and populations.
What we know
The relationship between income and happiness has been studied extensively in behavioral economics and psychology, and the popular belief that "money can't buy happiness" oversimplifies a genuinely more complex empirical picture. A widely cited 2010 study by Daniel Kahneman and Angus Deaton, using Gallup data from about 450,000 Americans, found that day-to-day emotional well-being rose with income up to approximately 75,000 dollars per year (in 2008-2009 dollars) and then flattened, while overall life satisfaction, a more reflective, evaluative measure, continued rising with income even beyond that point, suggesting money's effect depends on which type of well-being is being measured.
This finding was substantially revisited by a 2021 study by Matthew Killingsworth using real-time experience sampling data from over 33,000 employed adults, which found that both emotional well-being and life satisfaction continued rising with income well beyond 75,000 dollars, with no clear plateau in most of the sample, complicating the earlier flattening finding. Kahneman and Killingsworth subsequently collaborated on a 2023 adversarial reanalysis of both datasets and found the apparent contradiction was partly explained by a subgroup: for a minority of people already experiencing significant unhappiness for reasons unrelated to money, income above a certain point did not help much, while for the large majority, happiness continued increasing with income even at high levels, reconciling the two studies rather than declaring either simply wrong.
Cross-national research, including work using World Happiness Report and Gallup World Poll data, consistently finds a strong positive correlation between a country's GDP per capita and average reported life satisfaction, though the relationship shows diminishing returns, each additional dollar matters less at higher income levels, and other factors, including social support, freedom, and health, also correlate strongly with happiness independent of income, meaning money is one significant factor among several, not the sole determinant.
Research on how money is spent, not just how much is earned, also meaningfully affects its relationship to happiness. Studies led by researchers including Elizabeth Dunn have found that spending money on experiences and on other people (prosocial spending) tends to produce larger happiness gains than spending the same amount on material possessions, and that above a certain point, further income gains matter less for happiness than reduced financial stress, job satisfaction, and time autonomy. The honest scientific summary is that money's relationship with happiness is real, positive, and larger than the popular saying suggests, but it is not unlimited, uniform across all people, or independent of how the money is used, which is why "money buys happiness" is best treated as a mixed claim rather than simply true or false. Cross-cultural replications of this income-happiness research, including studies conducted across dozens of countries with very different average income levels and social safety nets, have generally found the positive income-happiness association holds broadly across diverse economic and cultural contexts, though the specific shape and steepness of the relationship varies somewhat by country and measurement method used.
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.
Evidence hierarchy
All sources
- High income improves evaluation of life but not emotional well-beingDaniel Kahneman and Angus Deaton, Proceedings of the National Academy of Sciences · 2010
- Experienced well-being rises with income, even above 75,000 dollars per yearMatthew Killingsworth, Proceedings of the National Academy of Sciences · 2021
- Income and emotional well-being: A conflict resolvedKillingsworth, Kahneman, and Mellers, Proceedings of the National Academy of Sciences · 2023
- World Happiness ReportSustainable Development Solutions Network / Gallup · 2024