Seems money can buy happiness after all

But some folks are still going to be sad sacks regardless.

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Your Back Page correspondent has long suspected that the person who coined the phrase “money can’t buy happiness” was either wealthy or deluded.

The only real question is: how much money correlates to how much happiness and is there a point where the law of diminishing returns kicks in even as the bank balance continues to swell? Now there’s a controlled trial your scribbler would happily sign up for!

Up until now, it seemed the jury was still out on the “how much” issue, with a 2010 Princeton University study suggesting there was a “happiness plateau” at around $US75,000 ($A114,000) annual income, while a 2021 Pennsylvania University study found such a levelling off was not evident and the smiles keep getting steadily broader as the wallet gets fatter.

Clearly this was a First World problem that needed sorting out, so the boffins at both illustrious institutions got together with an independent third party university to conduct a “reconciliation study”. The results of that collaboration were published this week in the Proceedings of the National Academy of Sciences. 

And in a blow for the “poor but happy” cohort, it appears the gut instincts of casino owners, lottery spruikers and right-leaning politicians the world over are on the money: on average, larger incomes are indeed associated with ever-increasing levels of happiness.

But before we chalk up a big win for the “greed is good” camp, the researchers are at pains to point out there is a devil in the detail. Turns out, there is an “unhappy cohort” within all income groups that ungratefully (our words there) plateaus on the happiness front at the $US100,000 a year mark.

“In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness,” lead paper author Matthew Killingsworth told media. “The exception is people who are financially well off but unhappy. For instance, if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees.”

But does this study reconcile the seemingly contradictory findings of the 2010 and 2021 studies?

Yes, the authors say. The 2010 study which had revealed the happiness plateau, had actually been measuring unhappiness in particular rather than happiness in general.

“So it tells us about the trend in the unhappy end of the happiness distribution, rather than the trend of happiness in general. Once you recognise that, the two seemingly contradictory findings aren’t necessarily incompatible,” Killingsworth said.

And the real-world implications of these findings?

According to the authors, this knowledge could inform government thinking about tax rates (yeah, right) or business thinking about how to compensate employees, as well as help individuals to navigate career choices or weigh a larger income against other priorities in life.

“Money is just one of the many determinants of happiness. Money is not the secret to happiness, but it can probably help a bit,” the lead author added.

Aren’t you glad they’ve sorted that out for you? Now better go check that there’s no more than $3 million in the super fund, because the new tax rate could make you unhappy.

The real secret to happiness is sending story tips to penny@medicalrepublic.com.au.