Most of us spend a considerable portion of our lives trying to earn more money.
We work longer than we need to. We compete for the promotion, take the role with the bigger title, change employers, move cities, absorb stress we would not otherwise accept, and postpone things we say matter to us. Somewhere underneath all of it sits an assumption we almost never say out loud: that the trade will leave us better off in some sense.
The cost of that pursuit is not paid in money. It is paid in hours worked, in weekends given over, in attention that was needed somewhere else, and in years that pass while the whole arrangement is treated as temporary.
Which makes it worth asking a question most of us never quite get around to. What does more money actually do?
There is a familiar answer, repeated so often that it barely registers as a claim any more. Happiness rises with income up to about seventy-five thousand dollars a year, and then it stops. Past that point, more money does nothing for how you feel.
The claim travels well. It fits in a sentence, it arrives with a number attached, which makes it sound settled, and it offers something to almost everybody: reassurance if you earn less, absolution if you earn more.
It came from a real study. It is not what the study found.
The original study measured two things
In 2010, Daniel Kahneman and Angus Deaton examined the relationship between income and wellbeing using more than four hundred thousand survey responses from American adults.¹
They did something that turned out to matter more than any single number in the paper. They did not treat happiness as one thing. They measured two different things we often bundle together under happiness, and reported them separately.
The first was daily emotional wellbeing: how people said they actually felt as they moved through their days, the running texture of being alive.
The second was life evaluation: the judgement people made when they stepped back and assessed their life as a whole.
The two behaved differently. Daily emotional wellbeing rose with income, then flattened substantially by around seventy-five thousand dollars a year. Life evaluation also rose, but kept climbing across the entire range the study covered.
In the popular retelling of this study, the first finding almost completely eclipsed the second, and the headline wrote itself - ‘Money doesn’t buy happiness beyond $75k’
Then somebody measured it differently
A decade later, Matthew Killingsworth tested the same question using a more immediate measure.²
Kahneman and Deaton had asked people to recall how they had felt the previous day. Killingsworth instead pinged participants at random moments through a smartphone app and asked them how they felt right then. Across more than 1.7 million reports from over thirty-three thousand adults, daily emotional wellbeing continued to rise with income throughout the range he measured. There was no universal seventy-five thousand dollar plateau.
What the two researchers did next
The obvious move would have been for each researcher to defend his own result. But neither did.
Kahneman and Killingsworth, together with the psychologist Barbara Mellers, pooled their data and analysed the disagreement jointly, looking for an explanation that could accommodate both sets of findings.³ The arrangement is called an adversarial collaboration, and it is considerably rarer than it should be.
It worked.
There was no universal income level at which daily emotional wellbeing stopped improving. Across the population it continued to rise with income, as life evaluation had been observed to do all along.
The important question was no longer whether money helped, but why it seemed to improve the judgement of a life more than the experience of living it.
What the early money does
At lower incomes, the answer is not mysterious.
Financial pressure creates anxiety and stress. It makes the days feel harder and the assessment of a life worse. Income that relieves that pressure can therefore improve both.
When additional income means rent is secure, an unexpected bill is manageable, and providing for your family becomes less stressful, the gain is real and substantial. Anyone who has lived with that pressure does not need a research paper to confirm it.
The interesting part is what happens once that pressure has eased.
How much more income adds
The 2023 collaboration used roughly one hundred thousand US dollars as the point around which it examined the earlier plateau claim.⁴ Above that level, the question was no longer whether income could relieve obvious financial hardship, but how strongly further income continued to track with wellbeing.
Killingsworth’s data allows a direct comparison. Take a household income of around US$100,000 and compare it with one around US$400,000. The income quadruples. Daily emotional wellbeing rises by about 2.2 points on a hundred-point scale. Life evaluation rises by about 6.6 points on the same scale.⁵
That is the striking part. Income has increased fourfold, yet the experience of daily life has shifted only modestly, while the judgement people make about their lives moves about three times as far.
More money seems to change the verdict we give our lives considerably more than it changes the experience of living them.
That matters because higher incomes are rarely pursued without cost. For many people, moving further up means longer hours, greater responsibility, more travel, more time on call, work brought home, and less time available for partners, children and friends.
None of that means the extra income is not worth pursuing. But a modest improvement in daily emotional wellbeing should at least make the trade-off visible.
What that means for the way we live
Perhaps the trade is worth it. But the evidence invites a more precise question: what are we hoping to improve by making the trade off?
Think about your own experience. When your income first gave you genuine financial room, did your days change? Did the background stress ease? Did providing become less fraught? Did your daily lived experience improve?
Chances are, it probably did.
Now think about the increases that came after that.
Did they change how life felt to anything like the same degree? Or did they change something else more strongly, the sense that you were progressing, doing well, getting somewhere?
If the second feels more familiar, the distinction in the research is no longer merely statistical. You are experiencing exactly what the data suggests more income will do.
So the old question, does money buy happiness, turns out to be too crude to be very useful.
Money can materially improve how life feels when it relieves financial pressure. Beyond that, further income still helps, but the gains in daily emotional wellbeing become modest. What continues to move much more strongly is the judgement we make about whether our life is going well.
That distinction matters if we are prepared to organise years of our lives around earning more. But it leaves another question. Why does money have so much power over the score we give a life?
And underneath it, where did we learn to keep score that way?
Footnotes
1. Daniel Kahneman and Angus Deaton, ‘High Income Improves Evaluation of Life but Not Emotional Well-Being,’ Proceedings of the National Academy of Sciences 107, no. 38 (2010): 16489–16493. The $75,000 figure was expressed in 2008–2009 US dollars and has never been adjusted in the popular retelling.
2. Matthew A. Killingsworth, ‘Experienced Well-Being Rises with Income, Even Above $75,000 per Year,’ Proceedings of the National Academy of Sciences 118, no. 4 (2021): e2016976118.
3. Matthew A. Killingsworth, Daniel Kahneman and Barbara Mellers, ‘Income and Emotional Well-Being: A Conflict Resolved,’ Proceedings of the National Academy of Sciences 120, no. 10 (2023): e2208661120.
4. Household circumstances and local costs vary considerably, so this figure is a practical benchmark rather than a universal threshold.
5. Figures calculated from the matched subsample in Killingsworth (2021), which included respondents who completed both daily emotional wellbeing and life evaluation measures specifically to allow a controlled comparison. Across the income range from approximately US$100,000 to US$400,000, daily emotional wellbeing rises by about 2.2 points on a comparable 0–100 presentation scale, while life evaluation rises by about 6.6 points, roughly three times as far.