Search Here

The subject of whether or not money can buy happiness has been played out in movies and television shows. Even though the concept of buying happiness is subjective for every individual, a new study conducted by economists attempted to find how much money is needed to achieve happiness. The economists reported that economic development could only buy happiness up to $36,000 gross domestic product (GDP) per person.

For this report, economists Eugenio Proto from the Center for Competitive Advantage in the Global Economy at the University of Warwick and Aldo Rustichini from the University of Minnesota examined the relationship between a country's wealth and its residents' life satisfaction.

"Whether wealth can buy a country's happiness is a major question for governments. Many policy-makers, including in the UK, are interested in official measures of national well-being," Proto said. "Our new analysis has one very surprising finding which has not been reported before - that life satisfaction appears to dip beyond a certain level of wealth."

The research team discovered that when people's incomes reached $36,000, life satisfaction levels peaked. The team surprisingly found that income higher than this number resulted in reductions in people's life satisfaction levels. The economists also reported that people living in nations with a GDP per capita of under $6,700 were 12 percent less likely to state that they were at their highest level of life satisfaction when compared to people living in countries with a GDP of $18,000. The researchers stated that once GDP per capita reached $20,400, people's levels of happiness were less noticeable. From $20,400 to $54,000 GDP per capita, the economists only found an increase in happiness by barely two percent.

"In our study we see evidence that this is down to changes in the aspiration levels of people living in the richest countries. As countries get richer, higher levels of GDP lead to higher aspiration. There is a sense of keeping up with the Joneses as people see wealth and opportunity all around them and aspire to having more," Proto explained. "But this aspiration gap - the difference between actual income and the income we would like - eats away at life satisfaction levels. "In other words, what we aspire to becomes a moving target and one which moves away faster in the richest countries, causing the dip in happiness we see in our analysis."

The study was published in PLOS ONE.