Money can buy happiness – just ask anyone without it. But the question of how much happiness has long been a focus of wellbeing science. I asked Prof Jan-Emmanuel De Neve, director at the University of Oxford Wellbeing Research Centre, what the data says.
Given we’re in a cost of living crisis, does this question even matter? Survival first, happiness later, right?
How we feel about the quality of our lives is what matters. So is there a link between money and happiness? Absolutely – especially at the bottom of the pay scale. As you move up, there are diminishing returns. So the wellbeing boost from a £20,000 salary moving to £40,000 would be significant, but to achieve that again, you’d have to move from £40,000 to £80,000, then £80,000 to £160,000. To get the same impact, you have to double each time.
Isn’t the magic number for happiness a £50,000 salary?
That’s from a 2010 study by two Nobel prize winners, Angus Deaton and Daniel Kahneman. They found that after $75,000 on average in the US – roughly £50,000 then – there was a flattening of emotions. So somebody making $100,000, when compared with someone making $75,000, wasn’t experiencing either more positive emotions or fewer negative emotions, such as worry. But since that study there’s been inflation and a deepening of the question itself.
How so?
It’s about what kind of happiness. If it’s the experience of positive emotions – so how happy you are right now, and absence of negative emotions – I’d estimate the satiation point now lies about £100,000 to £120,000. And if you’re looking for overall satisfaction with life, that point is higher still. There’s debate on the numbers though.
It’s shocking to think that only 1% of Britons will earn enough to feel life satisfaction. What else is debated?
Everyone agrees on the flattening of the curve. What people don’t agree on is the point at which happiness no longer goes up. There are few datasets capturing very rich people. The ones I’ve seen suggest a full flattening of the curve, and even point downwards.
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The few ultra-wealthy people I’ve met have been surprisingly pessimistic – and stingy. I’ve also read studies that found the more money you have, the less empathic you are, which doesn’t bode well for happy relationships.
I think the most important question is not whether money makes you happy, but do happier individuals make more money? We showed that if you look at adolescents and their levels of happiness, it’s predictive of how much they earn later.
I’m not sure I like this – please don’t tell me some people are born to earn more.
Not at all! It means we must do everything we can for young people to have a good and positive mindset.
So perhaps we should stop thinking about GDP and think about national happiness.
Totally. As one of the editors of the World Happiness report, I can tell you that the relationship between GDP and population wellbeing starts breaking down after a certain level of GDP per capita. That flattening of the curve happens nationally, too. Growth for the sake of growth doesn’t translate into further wellbeing.
Somebody should have told Liz Truss!
But with sustainable growth – improving educational opportunities, reducing inequalities, etc – you can still raise average wellbeing.
