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I read various claims, but this HowStuffWorks article seems the most representative (bolding is all mine):

The one place that money and happiness are significantly linked is when a person is unable to afford to meet their basic needs. There is an appreciable difference in levels of happiness between those below the poverty level and those above it...

Once people pass that poverty threshold, though, the money boost tapers off; Inuits in Greenland and Masai ranchers living in Kenyan dung huts are just as happy as the high-society Americans.

From :

...disappeared. Once people reached this level of income, sufficient to meet basic needs (except if you happen to live in Marin county, like I do), more income did not make people any happier or less stressed. Rather, individual personality factors and life circumstances were the major factors determining happiness.

I understand these are statistics. But these articles are also prescriptive to the individual reader,

For starters, you may want to rethink quitting that job of yours...People with jobs they find highly satisfying but that don't pay as well can be just as content.

people also tend to report higher levels of satisfaction after spending money on experiences rather than things

research tells us are the real sources of happiness -- social connections, challenging work, good health

Research studies show that spending money on experiences, such as family vacations, educational courses, or psychotherapy provides more happiness “bang for the buck” than spending money on possessions.


Is there a global absolute threshold above which earning more doesnt make you happier?

Can this statistical research be used to advise me on how to choose life priorities?

Should I rather spend on a movie ticket than a t-shirt (its a valid tradeoff where I live, in case you felt it was absurd) since experiences are superior?

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2 Answers 2

The Princeton University conducted a study in 2010 where they found that the happiness from salary tipping point was just under $75 000 a year.

The Forbes magazine stated it as such:

the sweet spot is somewhere between $50,000 and $75,000. If you make under $50,000, you might be stressed about your financial situation. If you make over $75,000, the additional returns on working longer hours might not be worth it anymore.

So there seems to be a tipping point, where additional salary makes you take on too much work, feeling more stress and more anxiety without raising your quality of life.

However, it's also mentioned that people with a lower salary, and especially a salary that is decreasing, makes the individual more vulnerable to social insecurity (divorce, sickness, decease of relatives etc.)

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That's an unbearably stupid generalizaton without fixing the locale. Cost-of-living in NYC and in Moscogee, OK are different – user5341 Dec 11 '12 at 17:25
@DVK well, I assume the study in its entirety would shed light on those considerations as well. What's presented here is an average, or a generalization if you will. The study actually covers all side question of the OP. – AndroidHustle Dec 11 '12 at 17:47
Could you dispute hsw when they said the Kenyan ranchers in dung huts are as happy asa rich American? What isq the scope of original research? And can you make life advice out off this? – aitchnyu Dec 11 '12 at 18:53
What about people who are so rich, that they don't need to have a salary? This study only talks about how salary relates to happiness, and doesn't look at how much money somebody has. In almost all cases, once you get above $75,000 you're going to be working long hours, or undergo a considerable amount of stress from your job. However, if you are independently wealthy, and have no need to work, then you can do whichever job makes you happiest, or no job at all. – Kibbee Dec 11 '12 at 18:55
It's this article: – minopret Jul 3 '13 at 17:00

Is there a global absolute threshold above which earning more doesn't make you happier?

No. Or, more cautiously, if there is such a threshold, it is so high that it can't be detected in the currently available data.

Using recent data on a broader array of countries, we establish a clear positive link between average levels of subjective well-being and GDP per capita across countries, and find no evidence of a satiation point beyond which wealthier countries have no further increases in subjective well-being. We show that the estimated relationship is consistent across many datasets and is similar to the relationship between subject well-being and income observed within countries. Finally, examining the relationship between changes in subjective well-being and income over time within countries we find economic growth associated with rising happiness. Together these findings indicate a clear role for absolute income and a more limited role for relative income comparisons in determining happiness.

Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102

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How do you account for the evidence in the existing answer, for a later study showing the opposite? – Oddthinking May 6 at 0:05

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