Can't buy me love (but can buy me comfort?)

A new report released by a pair of Princeton economists attempts to answer--empirically--the age-old question, "can money buy happiness?" Their conclusion? Yes...to a point.

People's emotional well-being - happiness - increases along with their income up to about $75,000, researchers report in Tuesday's edition of Proceedings of the National Academy of Sciences.

For folks making less than that, said Angus Deaton, an economist at the Center for Health and Wellbeing at Princeton University, "Stuff is so in your face it's hard to be happy. It interferes with your enjoyment."

Deaton and his colleague, Daniel Kahneman (who in addition to being an economist is also a renowned pyschologist), went on to note that the happiness effect levels off above $75k. After that point, while people may "feel they have a better life", their daily mood does not measurably improve. This, I think, is the interesting part of their findings.

I'm a strong believer that once basic comforts are covered and we no longer have to worry about actual survival (i.e. "making ends meet"), the remainder of our happiness has more to do with lifestyle choices (and personal preferences) than solely income. A job that could pay us $125k or $150k (as opposed to $75k) often brings with it more stress, longer hours, and less flexibility. The decision to take this job, then, is more a trade than an absolute upgrade.

The math at this point will likely be different for each person--for some, flexibility and leisure time can carry a huge value, and would cost much more than $50k or $75k in salary to compensate (for those who know me well, it should come as no surprise that I fall in this camp). For others, the prestige of making more money--or the happiness derived from luxury goods that are now within reach--could in fact be the most prominent lever for happiness.

But the fact that these divergences exist helps to explain why no measurable effect is found beyond the $75k threshold (at which most basic comforts can be covered). For each person who would do absolutely anything to make the extra dollar, there is likely another whose happiness would be destroyed by the additional stresses that the extra dollar might bring.

Of course, the ideal situation is simply to love your job--if you do for a living what you would do in your leisure time, then no sacrifice of lifestyle is necessary to make more money. You're simply getting paid to enjoy life. But as many of us know, this is usually easier said than done. Therefore, a series of trades is almost always necessary; it's up to each of us to determine how much we are willing to sacrifice for a higher salary. It's not always easy.

[Yahoo! News]