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Health & Balance

Money Can Only Buy So Much Happiness

Study Suggests There Are Limits to Money's Impact on Your Daily Emotions
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WebMD Medical Reference
Reviewed by Louise Chang, MD

Sept. 7, 2010 -- Money may shape your outlook on life, but it can only buy so much when it comes to your daily happiness.

"More money does not necessarily buy more happiness," write researcher Daniel Kahneman of Princeton University and colleagues in the Proceedings of the National Academy of Sciences.

Researchers found income can positively affect how you view your life, but it doesn't necessarily affect your daily emotions. Other factors, such as health, caregiving status, loneliness, and smoking are more likely to color your daily emotional state.

The study, based on more than 450,000 responses to a daily survey of 1,000 U.S. adults, showed that how people rated the quality of their lives -- on a scale from one to 10 -- rose steadily with annual income levels.

But the quality of people's daily emotional experiences leveled off at a certain stable income level, suggesting that there may be a salary cap on money's ability to buy happiness.

"Perhaps $75,000 is a threshold beyond which further increases in income no longer improve individuals' ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure," write the researchers. Participants' emotional well-being was measured according to their responses to questions about emotional experiences on the previous day.

The results showed that as incomes decreased below $75,000, the participants reported less happiness and increasing sadness and stress.

Researchers also found that the emotional pain of unfortunate events, such as divorce, disease, or being alone, was exacerbated by poverty.

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