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75,000 is the magic number
September 8, 2010 9:32 PM   Subscribe

"We infer that beyond about $75,000/y, there is no improvement whatever in any of the three measures of emotional well-being." Two social scientists at Princeton, Angus Deaton and Nobelist Daniel Kahneman, have a new paper in PNAS about money and the determinants of happiness. Increased income above $75,000 is not associated with higher subjective happiness, though it is associated with superior scores on measures of overall life satisfaction. Other tidbits: "Religion has a substantial influence on improving positive affect and reducing reports of stress, but no effect on reducing sadness or worry... The presence of children at home is associated with significant increases in stress, sadness, and worry."
posted by escabeche (49 comments total) 12 users marked this as a favorite

 
How do we know where stress ends and sadness begins and where worry is?
posted by curuinor at 9:37 PM on September 8, 2010


The plain PDF is much easier to read -- you don't need to keep scrolling back and forth.
posted by John Cohen at 9:39 PM on September 8, 2010 [1 favorite]


Depends where you live, how many people you have to take care of, what house you live in, etc. 75K can go a long ways to securing people's happiness, or barely make ends meet.
posted by Blazecock Pileon at 9:41 PM on September 8, 2010 [9 favorites]


Depends where you live, how many people you have to take care of, what house you live in, etc. 75K can go a long ways to securing people's happiness, or barely make ends meet.

But believing in a "magic number" is more emotionally satisfying.
posted by John Cohen at 9:52 PM on September 8, 2010 [1 favorite]


If I was making that, I'd be able to set back enough money to buy a starter house with cash in 8 years. And probably a much nicer car.

But money can't buy happiness, I love my apartment, love my '01 Alero, and I love the new job I start on Monday making half that. Sure it'd be nice, but as Mr. Christopher George Latore Wallace once said: Mo Money Mo Problems
posted by deezil at 9:53 PM on September 8, 2010


No, just average everyone together, that's Science.
posted by smackfu at 9:54 PM on September 8, 2010


Is this valid reason to tax the over-$75000 bracket extremely heavily?
posted by LSK at 9:55 PM on September 8, 2010 [2 favorites]


Scott Adams put it thusly:

Happiness (not eaten by wolves - eaten by wolves) < Happiness (driving a Porsche - driving a Hyundai)
posted by Navelgazer at 9:56 PM on September 8, 2010 [5 favorites]


In February the magic number was $60, 000. That's some serious inflation.
posted by sockpup at 10:34 PM on September 8, 2010


Depends where you live, how many people you have to take care of, what house you live in...

This is the first thing I thought of, too. If I were just a matter of me being single, 22 years old and pulling down $75K, you'd have to use a crowbar to get the smile off my face.
posted by Cool Papa Bell at 10:35 PM on September 8, 2010 [3 favorites]


Depends where you live, how many people you have to take care of, what house you live in, etc.

You need enough to get by without impending doom lurking in the shadows, however much that is (75k, 100k, 50k -- whatever). Beyond that, you're in the realm of money being a problem in itself (or not). I've certainly lived both sides of the divide and, for what it's worth, my best overall physical health has never coincided with my best overall bank account.

Go figure.
posted by philip-random at 11:53 PM on September 8, 2010 [1 favorite]


$75,000 would buy you 32,000 7oz. bags of Cereal Marshmallows. That should be good enough for anyone.
posted by oneswellfoop at 12:01 AM on September 9, 2010 [10 favorites]


The WSJ blog ran an article on that value adjusted for where you live. They don't really elaborate that much on their methodology.
posted by kmz at 12:02 AM on September 9, 2010 [2 favorites]


Soooooo sounds like I should be earning a lot more money, have a religion, and not have children.

Well, one out of three ain't bad. Yay, me.
posted by The ____ of Justice at 12:03 AM on September 9, 2010


Increased income above $75,000 is not associated with higher subjective happiness, though it is associated with superior scores on measures of overall life satisfaction

This must be why Richard Branson looks so bloody pleased with himself all the time.
posted by MuffinMan at 12:51 AM on September 9, 2010


Fun fact: that's about the threshold around which you're most likely in a salaried (non-hourly) position, so you can't just start working less as your hourly income rises.
posted by qvantamon at 1:54 AM on September 9, 2010 [1 favorite]


You know what, my theory is that it isn't money or wealth that brings happiness, but the increase therof. So someone making $30k, and then $40k and then $55k over the course of 3 years would be happier then someone who made $75k over a three year period (assuming they had been making that for some time in the past as well)
This must be why Richard Branson looks so bloody pleased with himself all the time.
There are plenty of people who seem happy all the time but aren't rich. And there are plenty of rich people who seem miserable. Of course, rich people can afford to spend lots of money on drugs. So there's always that to consider.
posted by delmoi at 1:59 AM on September 9, 2010


Case in point: In the American companies I know of, salary increases will be in average at least 3% a year. In those same companies, you usually earn an extra paid vacation week every 5 years. That is, a ~2% (1/48-1/50 work weeks) reduction in work hours every five years, or less than 0.5% a year.
posted by qvantamon at 2:01 AM on September 9, 2010


OMG so that's what happened to Angus! New career and rubber mask! It WAS a vicious episode, but that is a bit extreme....
posted by runincircles at 2:40 AM on September 9, 2010 [1 favorite]


"We infer that beyond about $75,000/y, there is no improvement whatever in any of the three measures of emotional well-being."

Try me. I dare you.
posted by Splunge at 3:38 AM on September 9, 2010


Sounds about right. I'm making about 2/3 what I used to, and in my local currency would be still exceeding the threshold by a reasonable amount. In reality, I wasted a lot of the difference and I can't say I'm any unhappier now. In fact I lead a saner less stressed life and arguably feel better.

Re the kids: well, maybe. But you can't savour life fully without experiencing bad things.
posted by i_am_joe's_spleen at 4:39 AM on September 9, 2010 [1 favorite]


I feel like these reports should weigh how many people are living on $X more heavily. It's ridiculous to think that a 55 year old that is the single income source for a family of 4 is going to feel as flush with 75,000 as a 22 year old that doesn't have other responsibilities. I wonder if you could make an equivalence chart - two people living on $80,000 isn't exactly like living on $40,000, (x0.5) maybe it's more like living on $60,000 (x0.75) each? A similar factor could be worked out for children.
posted by fermezporte at 5:12 AM on September 9, 2010


New parents at risk of depression.
posted by OmieWise at 5:49 AM on September 9, 2010


The report itself is more interesting than the silly "$75000 means happiness" anecdote.
posted by smackfu at 6:46 AM on September 9, 2010


The WSJ blog ran an article on that value adjusted for where you live. They don't really elaborate that much on their methodology.

According to this article in New York the magic number is more like $163,000. Now I dont feel soo bad about being unhappy despite being real close to the 75k area..However this gives me more ammo to get out of NYC pronto...
posted by The1andonly at 6:52 AM on September 9, 2010


I live in NYC. From 2000 to 2003, I made $26K with a decent college degree (Mcgill) and work experience from when I was 14 years old. From 2000 to 2003 I never had a lease. I flopped from YMCA to sublets and back again. I was miserable. No health insurance + Diabetes. I ruined my credit over a $50 bill I couldnt pay. I had cycles of overdraft fees that ruined my ability to eat.

I make $58000 now. I've never been happier in my life. No, I'm actually happy. I rent a studio apartment in the greatest neighborhood in the world. I can afford a cab ride over the bridge when I'm too drunk for the subway. I don't eat three meals, and \most of my possessions can fit in two suitcases. $75K in NYC is more than enough.

If you are a single guy, and think you need or 'deserve' more your a piece of shit in my book.
posted by lslelel at 7:03 AM on September 9, 2010 [1 favorite]


Yeah, single person, no one to support, no debt, the number has to be way lower. What is there to spend money on?
posted by smackfu at 7:09 AM on September 9, 2010


But you can't savour life fully without experiencing bad things.

Too many people have forgotten this, or have never known it.
Also, if you aren't happy making what you're making now, I can all but guarantee that you won't be happy making more.
posted by rocket88 at 7:14 AM on September 9, 2010 [1 favorite]


Poverty buys misery. No money for prescriptions, for the electric bill, for new shoes for the kid to start school in. Lack of poverty, i.e., money, goes a long way towards happiness. My current lack of happiness has nothing to do with my income, but that's easier to say with my bills paid and some savings.
posted by theora55 at 7:20 AM on September 9, 2010 [2 favorites]


As Bernadette Peters once said, "It's not the money. It's the stuff!"
posted by digsrus at 7:43 AM on September 9, 2010


lslelel, McGill was ranked 12th in the world in '07 and dropped to 19th in '10.. but still ranks the best of all Canadian schools (article here). I realize a single ranking or Macleans article doesn't really count for much but I'm interested in why you call your degree "a decent college degree". Sounds deprecating, but maybe I'm reading you wrong.
posted by mbatch at 7:47 AM on September 9, 2010


I rent a studio apartment in the greatest neighborhood in the world. I can afford a cab ride over the bridge when I'm too drunk for the subway.


Error encountered.
posted by milarepa at 7:58 AM on September 9, 2010


I did think an article on how to get back to, apparently, the spirit of Christianity by emulating the Christ was unintentionally hilarious when it seemed to peg the Messiah's income as topping out at $50,000:
“Success in the kingdom of God involves moving down, not up.” Platt calls on readers to cap their lifestyle. Live as if you made $50,000 a year, he suggests, and give everything else away. Take a year to surrender yourself. Move to Africa or some poverty-stricken part of the world. Evangelize.
So there you go, the secret finding the Kingdom of God is apparently making basically the median US income. Then again, it was the NY Times, and it was entitled The Gospel of Wealth, so there's a sub-ed with a sense of humour.
posted by meehawl at 8:03 AM on September 9, 2010


If you are a single guy, and think you need or 'deserve' more your a piece of shit in my book.

Up yours.

I live in San Francisco and make $70,000/year, and I still live paycheck-to-paycheck because I owe $40,000 on student loans. Come back when you have this big of a debt to pay off and we’ll talk.
posted by spitefulcrow at 8:10 AM on September 9, 2010 [2 favorites]


This must be why Richard Branson looks so bloody pleased with himself all the time.

... or, it's just that his diabolical plan is working out so well. Sell people massive amounts of shoddy product (and service), then take all the filthy lucre and build your own personal space program, so when the shit finally hits, you can split the planet altogether and boldly go where no mean wage earner has gone before, maybe propagate your own new species while you're at it, become God, go mad.
posted by philip-random at 8:34 AM on September 9, 2010


I live in San Francisco and make $70,000/year, and I still live paycheck-to-paycheck because I owe $40,000 on student loans. Come back when you have this big of a debt to pay off and we’ll talk.

Exactly. Except I owe $120k in student loans.
posted by amro at 8:35 AM on September 9, 2010


There's some mediocre frat-rap jam who's only redeeming factor is the hook: "Money can't buy you happiness, but I'm happiest when I can buy what I want, whenever I want"

The hook wasn't delivered very well, kind of off-kilter in a bad way. I guess that's why they were rapping about wanting money rather than having it.
posted by fuq at 8:39 AM on September 9, 2010


It seems like, for young, single people, at least, the biggest deciding factor (more than some magic paycheck number) is student loans and health insurance. I'm really, spectacularly lucky in that I have no debt and free health insurance. I also make $25K a year before taxes and live in Manhattan. I'm doing fine.
posted by oinopaponton at 9:02 AM on September 9, 2010


$75,000 in income is not nearly as satisfying as $75,000 in expenses.
posted by swift at 12:14 PM on September 9, 2010 [1 favorite]


Well, they also say it _does_ increase life satisfaction to have more, which seems right to me. A certain amount (I'd agree that it would vary by where you live / kids / etc, $75k in rural Alabama and $75k in NYC are vastly different things) gets you free from most worries, which helps with that day-to-day thing. But having more does allow you to do other things and possibly feel more secure which can increase overall satisfaction. At the very least, the more you make the more you can save for retirement/etc and possibly even retire much earlier, which certainly would make me more satisfied (I'd retire tomorrow if I already had the money).
posted by wildcrdj at 1:11 PM on September 9, 2010


Happiness (not eaten by wolves - eaten by wolves) > Happiness (driving a Porsche - driving a Hyundai)

I can't believe I fucked that up.
posted by Navelgazer at 2:21 PM on September 9, 2010


my theory is that it isn't money or wealth that brings happiness, but the increase therof.

Nah. It's having just a few dollars more than what your brother in law makes.

Oddly, 75k is low for Princeton.
posted by IndigoJones at 2:22 PM on September 9, 2010


If you are a single guy, and think you need or 'deserve' more your a piece of shit in my book.

This seems unnecessarily fight-y... was anyone claiming this?

Anyways, on to the subject at hand. Bill McKibben did a nice review of the economics and happiness literature in his first chapter of Deep Economy. Like the study quoted in the FPP, there is an income level below which every increase in income does in fact correlate with increased happiness. Since the studies he was describing were world-wide in scope, the threshold was considerably less than 75K. Other interesting things he points out is the effect of who you associate with: if your social context (friends, work colleagues, neighbours) tends to make less, you'll be happier with less.
posted by bumpkin at 2:32 PM on September 9, 2010


Happiness (not eaten by wolves - eaten by wolves) > Happiness (driving a Porsche - driving a Hyundai)

I can't believe I fucked that up.


I wish you had mentioned that BEFORE I gave that wolf my right leg in exchange for a Porsche.
posted by qvantamon at 3:29 PM on September 9, 2010


Oddly, 75k is low for Princeton

Why do you think that's odd? Princeton is a ridiculously expensive place to live.
posted by amro at 3:48 PM on September 9, 2010


Social comparisons tend to dictate happiness far more than income itself. It's really all about context - specifically where you fit in amongst your peers / family / friends. If you roll with people making 250,000+, 75k is going to seem like a pittance. It won't get you nearly as far when your lifestyle is geared toward maintaining a social presence in a higher-income group of people. So in a situation like that, more money very well may make a person happier...

...take the same person and drop them in a social sphere of people earning 50k or less a year, and suddenly that person will feel pretty good.

Alain de Botton talks about this at length in Status Anxiety, and Dan Ariely is the latest pop-psych guy to talk about this research.

The key to happiness, in the sense of the WSJ article is actually to make enough money that your basics are covered, and then align yourself in a social sphere with people who make slightly less than that. Our brains are comparison machines...so its really more about who we are comparing ourselves to than how much we make.
posted by jnnla at 3:57 PM on September 9, 2010


Social comparisons tend to dictate happiness far more than income itself. It's really all about context - specifically where you fit in amongst your peers / family / friends. If you roll with people making 250,000+, 75k is going to seem like a pittance. It won't get you nearly as far when your lifestyle is geared toward maintaining a social presence in a higher-income group of people. So in a situation like that, more money very well may make a person happier...

Yeah, I guess I can see how this would be true if you're making a lot of money, but if you're poor and the people in your social sphere are poor then it doesn't make you feel better to have slightly more than them (like say you just got your tax return). In large part because I think poor people tend to spend more money on others, such as their family and friends in need. So if I have more then it would just make me miserable to keep it while those around me have less. In fact, it would be pretty close to impossible. So any extra would go to buying prescriptions or paying for doctor visits or helping out with food or the electric. I can see why it would be different if "having less" meant having a 2008 Porsche instead of a 2011. But I also don't think I ever want to be that rich and worry about that sort of thing.
posted by Danila at 4:44 PM on September 9, 2010


The median income is 50k here? WTF AMERICA? Nobody told me, and now I feel cheated.
posted by thsmchnekllsfascists at 10:10 AM on September 10, 2010


One of the main findings on research into economics and happiness is that two things that matter a lot to people are relative position compared to others, and what your expectations were.

Since this is study of Americans only, and in 2008-9 only. This is not necessarily like some universal human truth, applicable everywhere and for all time.

Why $75k could be the apparent cutoff might be because there's a large group people in that bracket feeling pretty good about themselves, feeling they did pretty well for themselves, and noticing they're doing comfortably better than most people they know.

Twenty years ago, maybe that magic number would only have been $60k, and twenty years from now, maybe it'll be a $100k.

Btw, other studies have shown a rapid drop-off in the amount of extra happiness caused by extra income from as low-levels as $16k.
posted by philipy at 7:50 PM on October 1, 2010


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