A new study from researchers at the University of Pennsylvania and Princeton University challenges the age-old question: Does more money lead to greater happiness? The findings, published this week, suggest that while higher income can indeed enhance life satisfaction, the effect tapers off beyond a certain threshold.
The research, led by Penn’s Matthew Killingsworth and Princeton’s Daniel Kahneman, builds on their earlier work exploring the money-happiness connection. Analyzing data from over 33,000 U.S. adults, the study found that happiness rises steadily with income up to around $75,000 per year. Beyond this point, additional income yields diminishing returns, with only modest increases in well-being for most people. However, the researchers noted exceptions: for individuals with a strong focus on financial success, happiness continued to rise with higher earnings.
“Our findings clarify a long-standing debate,” Killingsworth said. “Money matters for happiness, but its impact depends on how much you already have and what you value.”
The study also highlighted that life circumstances, such as health and relationships, play a significant role in overall well-being, often outweighing the influence of income alone. These insights could inform policies aimed at improving quality of life, the researchers suggest.
