Can Money Buy Happiness After All?

In 2012, two soon-to-be Nobel Prize winners in economics, Daniel Kahneman and Angus Deaton, studied the relationship between money and happiness. They reported finding that income up to about $75,000 annually can increase your happiness, after which more money generally does not result in more happiness.

That has been the received wisdom for the past decade and a half, but has now been refined. Interestingly, Dr. Matthew Killingsworth of the University of Pennsylvania published his own study in 2021, finding that more income increases your happiness without limit. Seventy-five thousand dollars a year is good, but $100,000 is better and $1,000,000 is way better for your happiness.

It is far from unusual for academic studies to disagree. Different subjects, different data sets, different assumptions, different methods, etc. can lead to different conclusions. Killingsworth and Kahneman put their heads together and, in a case of “adversarial collaboration,” did something that social scientists should do more of—they cooperated to try to improve both their findings. Initially, they added a third author to act as sort of a referee–Dr. Barbara Mellers, also a psychologist like Kahneman and Killingsworth.

Then they reexamined the original data and methods from the 2012 Kahneman study and the 2021 Killingsworth study. The three concluded that the new findings were best explained by splitting the subjects into three groups—the least happy, the middle-range happy, and the most happy. They found that for the least happy group, more income did indeed increase their happiness up to about $100,000 annually. Happiness then plateaued.

For those characterized as “middle-range happy,” there was a linear relationship between income and happiness. More income led to more happiness, and there was no ceiling to the effect for them.

For the most happy group of subjects, more income led to more happiness, and that happiness actually accelerated after the $100,000 mark was passed.

This reinterpretation of the data from the initial studies is welcome and informative. Money might be the root of all evil, but it can also be a source of happiness. However, it is a source of happiness primarily for folks who are already happy. Our take is that it’s wonderful to win the lottery or gain a big inheritance from a distant relative you barely know and therefore will not miss. Money that falls in over the transom or that you discover buried in your yard is an unalloyed good.

However, if you take the message from the new study to be that greed is good and it is a sensible thing to gauge your success in life by how much money you have, we’d urge you to think again. Recently, we blogged about neurologist Guy Leschziner’s new book The Seven Deadly Sins: The Biology of Being Human (2024) [https://ethicsunwrapped.utexas.edu/judging-the-seven-deadly-sins] In so doing, we gave short shrift to his chapter on greed. We probably shouldn’t have.

In that chapter, Leschziner examines the recent social science research on greed, and it’s not a pretty picture. The evidence shows that greed is associated with:

Neuroticism
Lower self-esteem
Envy
Narcissism
Antagonism
Depression
Unhappiness
Anxiety
Emotional instability
Machiavellianism

People who are greedy are more likely to engage in a raft of behaviors that break moral codes, such as cheating, bullying, and infidelity. Greed fuels most of the financial scandals that we constantly read about in the business pages. Moreover, greed inhibits the activities that do in fact help people be happier, such as prosocial behaviors like sharing, donating, and volunteering. It also interferes with people’s ability to empathize and sympathize with others, which is bad because social connections with other people are a much greater predictor of happiness than money. Leschzinzer writes: “Greed causes people to focus only on their own needs and wants, at the expense of concepts of values of right, justice, and norms, driving activities such as deception, fraud and theft.”

Money may be good, but greed is not. Gordon Gekko was wrong.

Sources:

Ani Freedman, “Money Does Buy Happiness, and for One Group of People, Top Economists Say the Limit Does Not Exist,” Fortune, Mar. 17, 2025.

Karlijn Hoyer et al., “Greed: What Is It Good For?” Personality and Social Psychology Bulletin, Vol. 40, #4, pp. 597-612 (2022).

Daniel Kahneman & Angus Deaton, “High Income Improves Evaluation of Life but Not Emotional Well-being,” PNAS, Vol. 107, No. 38, pp. 16489-16493 (Sept. 7, 2010).

Matthew A. Killingsworth, “Experienced Well-being Rises with Income, Even Above $75,000,” PNAS, Vol. 118, No. 4, e2016976118 (Jan. 18, 2021).

Guy Leschziner, Seven Deadly Sins: The Biology of Being Human (2024).

Evan Osnos, “Life after White-Collar Crime,” The New Yorker, Aug. 23, 2021.

Terri Seuntjens et al., “Dispositional Greed,” Journal of Personality and Social Psychology, Vol. 108, No. 6, pp. 917-933 (2015).

Terri Seuntjens et al., “Greedy Bastards: Testing the Relationship between Wanting More and Unethical Behavior,” Personality and Individual Differences, Vol. 138, pp. 147-156 (Feb. 2019).

Shiyu Wei et al., “Greed Personality Trait Links to Negative Psychopathy and Underlying Neural Substrates,” Social Cognitive and Affective Neuroscience, Vol. 18, No. 1 (2023).