I just thought this picture was funny (terrible sense of humor, I know). People say that you can't put a price on happiness. That happiness is some sort of magical concoction of intangible feelings and uncontrollable, outside forces that impact your life all at the same time.
In a recent article released by Time, a new study from Princeton University claims that maybe there is a number for happiness. That number happens to be $75,000. The study, which drew on more than 450,000 Americans polled by Gallup and Healthways in 2008 and 2009, claim that the further a person's household income falls below that magical $75K level, the unhappier he/she is. However, no matter how much more than $75K a person makes, it doesn't give them positive, correlated gains. For example, if I make $40K, my unhappiness is greater than my incremental happiness above "normal" if I made $120K.
I have to note though that the study also mentions that there are different types of happiness- there's the changeable, day-to-day mood and then there's the level of satisfaction you feel about the overall direction of your life.It seems like it's this second type of happiness that is most strongly correlated with income. This kind of makes sense considering income probably affects the way people think about how their lives are going- it's difficult to find any other metric to compare yourself against if you wanted to figure out how you stack up against the guy standing next to you.
The study believes that it's not low income that makes people sad, but more that less money makes people feel more ground down by other issues- like health, relationships, etc.(You know, the harder, more tangible problems- not just whether your stocks will vest in time or whether or not the funds you've put a few thousand in are showing positive gains.) Among divorced people, about 51% who made less than $1,000/month reported feeling sad or stressed the previous day, while only 24% of those earning over $3,000 a month did. At that magic number of $75K though, this discrepancy disappears, and individual temperament and life circumstances (age, education level, job, etc.) more significantly affect how a person feels. Economist Angus Deaton believes that it's because at this $75K level, people begin to feel like they have the expendable income to do things that make them feel good- like going out with friends.
All of this is interesting for many reasons. The thing that intrigues me the most is that the data was collected at possibly the worst part of the economic recession, so I wonder if the data would be slightly different now. (And if it was, would it be higher or lower? Higher than $75K signifying that people realize that money makes them feel much better than originally thought? Or lower, which would mean that people no realize that they can live on much less than they originally thought, and would be happy living simpler lives in light of the destruction the recession has caused?)
Finally, the study mentioned that money is closely tied to self-esteem (something that has a strong relationship but not to be used synonymously with happiness). The study showed that no matter their income level, people feel their life is working out better with each raise they receive, which means there's no harm in reaching for that next big thing!
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