Take three people. All are unmarried, 33-year-old women who live in the United States. One makes an annual salary of $40,000, another makes $120,000, and the third makes $200,000. Who do you think is the happiest?
According to a recently released study (paywall) in the burgeoning field of happiness research, the two higher-earning women are likely to report more satisfaction with their lives than the one who makes $40,000. But, perhaps surprisingly, the psychologists who conducted the study find that the one making $200,000 is probably no happier than the one making $120,000. This is because both the $120,000 and $200,000 women have incomes above $105,000, which according to their research is the point at which greater household income in the US is not associated with greater happiness. The technical term for this cutoff is the income “satiation point.”
The study is based on a life-satisfaction survey conducted on over 1 million people as part of the Gallup World Poll. Respondents across the world were asked to rate their lives on a scale of 0-10, where 0 is the “worst possible life” and 10 is the “best possible life.” (This author would give himself an eight.)
The researchers analyzed the relationship between this score and household income. They find that in every region of the world, after accounting for a person’s age, gender, and marital status, people with higher incomes are happier. But they also find that there is a level of income at which happiness no longer increases with more money. This varies by region, with Australia and New Zealand the highest and Latin America and the Caribbean the lowest. They even find some evidence that in certain places, when incomes rise above the cutoff level, life satisfaction gets lower.
Read more at Quartz.