New study reveals that money can buy happiness, especially if you're a billionaire

A new study shows that money can buy happiness, contradicting years of upper-class claims to the contrary.

Recent findings published by Wharton School happiness researcher Matthew Killingsworth indicate that millionaires and billionaires are happier than those earning up to $500,000 a year. The research directly contradicts the hedonic treadmill theory, which suggests that regardless of how much wealth one obtains, people adapt to normal levels of happiness and the joys that money can buy are not so novel once a certain threshold of wealth is reached.

However, happiness doesn't seem to stagnate the more money you make. In fact, Killingsworth found a correlation between increased emotional well-being and income among millionaires and billionaires, pointing to higher rates of happiness. “The results suggest that the positive association between money and well-being continues at the highest levels of the economic ladder,” he explained to Bloomberg.

Before publishing the study, Killingsworth was a member of a team of scientists dedicated to challenging the idea that happiness can’t be bought. He worked alongside the late Nobel Prize-winning economist and psychologist Daniel Kahneman, who famously challenged the findings in his famous 2010 paper with economist Angus Deaton. At the time, Kahneman and Deaton claimed that happiness increased with income until around $60,000 to $90,000 a year, where it plateaued. Killingsworth worked with Kahneman and a team of fellow scientists to continue debunking the claims in the 2010 paper.

Together, Kahneman and Killingsworth found that the correlation between money and happiness extended to people who earned at least $500,000 a year, measuring participants' daily happiness levels through a smartphone app developed by Killingsworth called Track Your Happiness. In an interview with the Washington PostKillingsworth noted that real-time data input allowed for more authentic results by “repeatedly pinging people at random times during daily life and asking them about their happiness at that moment in real time.”

After Kahneman's death, Killingsworth published his work with additional evidence indicating that those with a net worth of millions or billions reported average life satisfaction.

Combining the data used in his previous research, as well as the results of a 2018 study of 4,000 people with an average wealth of $3 million to $8 million from 17 countries, and a 1985 survey of the Forbes List of the richest Americans: Killingsworth was able to determine the correlation between greater wealth and higher levels of happiness.

Those earning around $500,000 or more reported an average life satisfaction of 5.5 and a six out of seven, while those earning around $100,000 a year reported a rating of around 4.6. Those earning between $15,000 and $30,000 a year reported just over a four.

“The magnitude of the gap between the lowest and highest incomes is huge,” Killingsworth said, noting that this indicates a stark divide in happiness levels between middle- and upper-class people. “Within the bounds of what money can explain, a large part of that gap occurs above median income.”

While happiness cannot be bought, Killingsworth's study shows that money can help meet important needs such as adequate food, shelter and stability. While money is a significant factor in a person's overall satisfaction, in the happiness researcher's previous study with Kahneman, there was a minority of wealthy people who felt dissatisfied with their rising income.

“In simpler terms, this suggests that for most people higher incomes are associated with greater happiness,” Killingsworth told the Washington Post At the time, the exception was people who were well off but unhappy. For example, if you are rich and miserable, having more money won't help you. For everyone else, having more money was associated with greater happiness to somewhat varying degrees.

This “unhappy minority” amounted to 20 percent of participants whose unhappiness reportedly “declines with increasing income up to a threshold, and then shows no further progress.” However, these participants reported feelings associated with preexisting problems that did not correlate with their income, including heartbreak, grief, or clinical depression. Their “suffering” decreased slightly as their income increased to about $100,000, but not marginally beyond that.