Digest

This episode of Planet Money delves into the complex relationship between money and happiness, revisiting a 2010 study that suggested a "happiness plateau" at $75,000 a year. The episode features interviews with researchers who have challenged this finding and ultimately uncover a more nuanced understanding of how income affects our emotional well-being. The episode begins by introducing the 2010 study by Angus Deaton and Daniel Kahneman, which introduced the concept of a happiness plateau. The study found that while happiness increases with income, it levels off after reaching a certain point, around $75,000 a year. However, happiness researcher Matt Killingsworth challenges this finding using his own experience sampling data, finding that happiness continues to increase with income, even beyond the $75,000 mark. To resolve this discrepancy, Danny Kahneman, one of the authors of the 2010 study, reaches out to Matt Killingsworth to collaborate on a study to investigate the relationship between money and happiness. Their "adversarial collaboration" reveals that the discrepancy in their findings stems from the different ways they measured happiness. Danny's study relied on yes-no questions, which limited the range of happiness responses, while Matt's study used a continuous scale, allowing for a more nuanced understanding of emotional well-being. By analyzing Matt's data, the researchers find that the happiness plateau exists for the unhappiest 15-20% of people, but not for the overall population. This suggests that money can mitigate unhappiness up to a certain point, but beyond that, other factors come into play. Interestingly, the researchers also discover that for the happiest 15% of people, happiness actually accelerates with increasing income. This suggests that for those who are already happy, money can further enhance their well-being. The episode concludes by highlighting the importance of adversarial collaboration in scientific research. By working together, researchers can challenge assumptions, uncover hidden patterns, and ultimately arrive at a more accurate understanding of complex phenomena.

Outlines

00:00:30

Money and Happiness: A Nuanced Relationship

This episode explores the relationship between money and happiness, revisiting a 2010 study that suggested a "happiness plateau" at $75,000 a year. The episode features interviews with researchers who have challenged this finding and ultimately uncover a more nuanced understanding of how income affects our emotional well-being.

00:06:23

The Happiness Plateau: A Controversial Finding and Its Challenges

The episode delves into the 2010 study by Angus Deaton and Daniel Kahneman, which introduced the concept of a happiness plateau. The study found that while happiness increases with income, it levels off after reaching a certain point, around $75,000 a year. However, happiness researcher Matt Killingsworth challenges this finding using his own experience sampling data, finding that happiness continues to increase with income, even beyond the $75,000 mark.

00:15:45

Adversarial Collaboration: Uncovering the Truth About Happiness and Income

Danny Kahneman, one of the authors of the 2010 study, reaches out to Matt Killingsworth to collaborate on a study to investigate the relationship between money and happiness. Their "adversarial collaboration" reveals that the discrepancy in their findings stems from the different ways they measured happiness. Danny's study relied on yes-no questions, which limited the range of responses, while Matt's study used a continuous scale, allowing for a more nuanced understanding of emotional well-being.

00:24:09

The Plateau Revealed: A Hidden Pattern and Surprising Twist

By analyzing Matt's data, the researchers find that the happiness plateau exists for the unhappiest 15-20% of people, but not for the overall population. This suggests that money can mitigate unhappiness up to a certain point, but beyond that, other factors come into play. Interestingly, the researchers also discover that for the happiest 15% of people, happiness actually accelerates with increasing income. This suggests that for those who are already happy, money can further enhance their well-being.

Keywords

Q&A

• What is the "happiness plateau" and how was it originally discovered?

  The happiness plateau is the idea that happiness increases with income but levels off after reaching a certain point, typically around $75,000 a year. This concept was introduced in a 2010 study by Angus Deaton and Daniel Kahneman, who found that people's emotional well-being, as measured by their daily experiences, plateaued after reaching that income level.

• How did Matt Killingsworth challenge the happiness plateau finding?

  Matt Killingsworth, a happiness researcher, used experience sampling data to study how people's emotions fluctuate throughout the day. He found that happiness continued to increase with income, even beyond the $75,000 mark, suggesting that the plateau might not exist.

• What was the outcome of the adversarial collaboration between Danny Kahneman and Matt Killingsworth?

  The collaboration revealed that the discrepancy in their findings stemmed from the different ways they measured happiness. Danny's study relied on yes-no questions, which limited the range of responses, while Matt's study used a continuous scale, allowing for a more nuanced understanding of emotional well-being. They ultimately found that the plateau exists for the unhappiest 15-20% of people, but not for the overall population.

• What are the implications of the research findings for our understanding of the relationship between money and happiness?

  The research suggests that money can play a role in our emotional well-being, but it's not the only factor. For the unhappiest group, money can mitigate unhappiness up to a certain point, but beyond that, other factors come into play. For the happiest group, money can actually enhance their well-being. Ultimately, finding happiness requires a balance of factors, including social connections, exercise, and living in the moment.

Show Notes