The old adage that money can’t buy happiness may finally need to be put to rest.
A broad body of research has long shown that money and happiness are closely related, though it was largely believed that once someone earns enough money to afford a modest, comfortable life — usually around $75,000 — the happiness benefit trails off.
However, this “happiness plateau,” as researchers call it, could be nothing more than a convenient myth. According to a new study by Matthew Killingsworth, a senior Wharton School fellow at the University of Pennsylvania, the ultra-rich are far happier than people earning $500,000 a year, who are themselves notably happier than low- and middle-income earners.
Like with income itself, Killingsworth found that there is a big gap in happiness between high- and low-income Americans.
“The difference in happiness between the top and bottom of the economic distribution was also quite large, contrary to the notion that money is only associated with small differences in happiness,” he wrote on his website. “The magnitude of the differences can be substantial.”
More money, more happiness?
While more money may have meant more problems for the late hip hop icon Notorious B.I.G., for most Americans, it means more happiness.
For years now, Killingsworth has been chipping away at the idea of the happiness plateau. In 2023, he was a lead researcher on a widely publicized study that found earnings of up to $500,000 per year indeed increased one’s reported levels of happiness.
That isn’t to suggest people stopped getting happier if they earned more than that amount. Rather, it was a limitation of good data on people wealthier than that. That’s where his new study comes into play. It’s mostly a continuation of the one released last year, now updated with the happiness levels of millionaires and billionaires.
What the new study finds is that these ultra-rich people are, in fact, much more happy than people with modest incomes in the $70,000 to $80,000 range — the level historically associated with the happiness plateau.
Previous research analyzed a limited range of incomes, Killingsworth said, making it difficult to determine the money-to-happiness ratio for people at the top of the income distribution.
Many folks then filled in the blank with the idea that “each person simply needs to get ‘enough’ and can then rationally shift all their attention to things beside money,” he said. Another common theory suggests that the trappings of high society and its keeping-up-with-the-Joneses mentality actually made rich people less happy.
“The simplicity this implies may be one reason why the idea of a plateau is so attractive,” he added.
But the reality is just that many previous studies that tracked income and happiness didn’t have great data on the rich. And the reason for that, at least, is obvious.
“Perhaps rich people are disinclined to spend their free time taking surveys,” he said.
More from Money:
Saving Money Might Be the Secret to Better Sleep: Study
How Bad Is Inflation in the U.S., Really?
To Lower Home Prices, Builders Are Cutting Back on… Hallways?