“Money doesn’t buy happiness”: a phrase uttered only from the mouths of people who often have lots of it. We’ve all been told this at one point or another, and while money is certainly not a guarantee of happiness, studies have suggested that having a little extra to cover all bills and go on lavish holidays can help get you there.
Now, another study has been added to the pile, finding that giving people from different backgrounds and cultures extra money ($10,000 to be exact) appears to make them happier – but only up to a point. Those earning $123,000 a year or over did not appear to increase happiness, suggesting there is a point at which money becomes less impactful on overall quality of life.
“By comparing cash recipients with a control group that did not receive money, this preregistered experiment provides causal evidence that cash transfers substantially increase happiness across a diverse global sample,” the authors write in the study published in PNAS.
“These gains were greatest for recipients who had the least: Those in lower-income countries gained three times more happiness than those in higher-income countries.”
Finding out whether money can actually buy happiness is monumentally difficult. Happiness is a spectrum, so measuring it accurately over time in just one person is tough; comparing this to others is even tougher. In an attempt to illuminate more on the subject, two wealthy donors agreed to redistribute $2 million (£1.7 million) to 200 people across seven countries (sorry, we wanted to take part too but it’s over now). Countries ranged from high-income countries, such as the USA, to lower GDP average countries, such as Kenya. The participants all spoke some English, had a wide array of ages, and were mostly educated to degree level or higher.
They were given a one-off payment of $10,000 (£8,500) and told to spend it in three months, before being asked to fill out a monthly survey for three months and another survey six months after payment. A control group of 100 individuals who did not receive any money was also included (worst group ever).
Based on the five-item Satisfaction with Life Scale and a one to five score measuring positive and negative affect, participants who received money indicated significant happiness improvements over the control group, with the effect being higher in lower-income countries. People with $123,000 per year salaries experienced no significant gain in happiness.
Across the 200 cash-receiving participants, total life satisfaction improved by an average of 0.36 points per person. While the wealthy donors' satisfaction decreased by an estimated 0.16 points each, overall, the redistribution of wealth provided 225 times more satisfaction compared to the donors keeping the money.
On balance, it appears that, up to a point, money can buy more happiness, and the loss of money for wealthy people likely has less of an impact than the gain experienced by others. As one of the authors told ABC News, $10,000 is a life-changing amount of money for many, and in this case, the results speak for themselves.
The study was published in PNAS.