The studies on the correlation between income and happiness have a bit of history. In 2010, a study led by Daniel Kahneman found that the happiness of individuals increases with (log) income until about $75,000 per year and then flattens out. However, the work of Killingsworth (2021) showed contradictory results where happiness just followed a linear trend with the log (income).
Join forces!
The original study of Kahneman and Deaton had survey responses from about 450,000 US residents that captured answers on their well-being.
Killingsworth’s work, on the other hand, had 1,725,994 reports of well-being from 33,391 employed adults (ages 18 to 65) living in the US. It found happiness advancing linearly even beyond $200,000 per year.
The conflict prompted an ‘adversarial collaboration‘ with Barbara Mellers as the facilitator.
The hypothesis
They started with a hypothesis for the test:
1) There is an unhappy minority whose unhappiness reduces with income up to a threshold, then shows no further progress.
2) A happier majority whose happiness continues to rise with income.
The ‘joint team’ stratified Killingsworth’s data into percentiles and here is what they found:
| Percentile of happiness | Slope up to $100k | Slope above $100k |
| 5% (least happy) | 2.34 | 0.25 |
| 10% | 1.75 | 0.52 |
| 15% | 1.90 | 0.34 |
| 20% | 1.84 | 0.62 |
| 25% | 1.52 | 1.12 |
| 30% | 1.33 | 1.21 |
| 35% | 1.26 | 1.21 |
References
Matthew Killingsworth; Daniel Kahneman; Barbara Mellers, “Income and emotional well-being: A conflict resolved”, PNAS, 2023, 120(10).
Daniel Kahneman; Angus Deaton, “High income improves evaluation of life but not emotional well-being”, PNAS, 2010, 107(38).
Matthew Killingsworth, “Experienced well-being rises with income, even above $75,000 per year”, PNAS, 2021, 118(4).
