- Recent surveys of hundreds of thousands of people, in over 150 countries, show that richer people report being more satisfied with their lives overall, but that the richer you become, the more money you need to increase your satisfaction further. This is because people spend money on the most important things first. Someone earning $100,000 per year is only a little more satisfied than someone earning $50,000. The best available study found that each doubling of your income correlated with a life satisfaction 0.5 points higher on a scale of 1 to 10.
- If you look at how ‘happy’ people say they are right now, the relationship is weaker. One large study found people in countries with average incomes of $32,000 were only 10% happier with their lives than those in countries with average incomes of just $2,000; another within the US could find no effect above a $40,000 income for a single person.
- Moreover, some and maybe even most of this relationship is not causal. For example, healthier people will be both happier and capable of earning more. This means the effect of gaining extra money on your happiness is weaker than the above correlations suggest. Unfortunately, how much of the above relationships are caused by money making people happier is still not known with confidence. Once you get to an individual income of around $40,000, other factors, such as health, relationships and a sense of purpose, seem far more important than income.
Robert Wiblin, Everything you need to know about whether money makes you happy, 80,000 Hours blog, 2 March 2016
Added to diary 15 April 2018