Can money buy happiness? The 2023 research update

Cost Me Research Desk · May 27, 2026

TL;DR. The 2010 finding that happiness flattens around $75,000 was real for some people and wrong for most. A 2023 adversarial collaboration between the two researchers most associated with the question resolved it: money keeps buying happiness past six figures for almost everyone — except a small unhappy minority for whom no amount helps.

For about a decade, one of the most quoted findings in the happiness literature was that emotional well-being levels off at around $75,000 a year. Above that, more money stopped helping. The number showed up in graduation speeches, in articles about minimalism, in arguments against ambition. It also turned out to be an oversimplification of a much more interesting result.

Here's what the research actually says now.

The original finding

Kahneman and Deaton (2010) analyzed more than 450,000 responses to a Gallup phone survey of US residents. They separated two kinds of well-being. One was evaluative: how satisfied are you with your life overall, on a 0–10 ladder? The other was experienced: did you experience happiness, sadness, stress, worry, anger, a lot of the day yesterday? (Kahneman & Deaton, 2010).¹

The result that became famous: life evaluation kept rising with income through their full range, but experienced emotional well-being plateaued at approximately $75,000 of household income. Above that threshold, day-to-day happiness didn't improve.

That finding fit a pleasing narrative — that money buys a comfortable life but not a happier one — and it was repeated enough that it became received wisdom.

The 2021 paper that broke the plateau

Eleven years later, Matt Killingsworth used a different methodology and found a different answer. Instead of a phone survey, he used experience sampling — a smartphone app that pinged subjects at random times during the day and asked how they felt right now. He collected over 1.7 million data points from more than 33,000 working adults (Killingsworth, 2021).²

His result: experienced well-being kept rising with income through his full range, well past $200,000 a year. No plateau. The 2010 ceiling looked like an artifact of Kahneman and Deaton's survey design — specifically the binary “did you feel happy yesterday: yes or no” framing, which loses resolution at the top of the scale.

For a brief period the field had two papers by two prominent researchers, in the same journal, reaching opposite conclusions. So they collaborated.

The 2023 adversarial collaboration

Killingsworth, Kahneman, and Mellers (2023) sat down together and reanalyzed Killingsworth's data with the goal of explaining both findings (Killingsworth, Kahneman & Mellers, 2023).³ What they found was more nuanced than either prior paper.

For the happiest 70% of people, happiness rises with income through the entire range studied — past $500,000 a year. There is no plateau, no diminishing returns at the $75,000 mark, no inflection point.

For the unhappiest 15% — people scoring in the bottom portion of well-being measures — money helps up to around $100,000 and then stops helping. This is where Kahneman and Deaton's plateau came from. It was real, but it described a specific subset of people, not the average.

For most people, more money keeps buying happiness past six figures. For an unhappy minority, no amount of money helps.

The interpretation the three authors agreed on: above roughly $100,000, money continues to buy happiness for people whose unhappiness has financial roots, and stops buying happiness for people whose unhappiness doesn't. Bereavement, depression, a bad marriage, chronic pain — these don't respond to income, so income stops helping the people who have them.

What this means for spending decisions

The honest takeaway is not “money buys happiness, so spend.” The 2023 study is about income, not spending — and the mechanism it identifies is almost entirely about reducing financial stress, not about consumption.

Killingsworth's data shows that income increases well-being most strongly when it improves a person's sense of control over their time and their choices. Buying a more expensive version of a thing you already had doesn't do that. Eliminating the background anxiety that you can't afford something urgent does.

This is why people who hit financial independence report sustained gains in well-being while people who hit a single big purchase report a spike that fades in weeks. The well-being gains are coming from the structural change, not the object.

What about wealthy unhappiness?

The findings don't contradict the obvious observation that some rich people are deeply unhappy. They explain it. If your unhappiness is rooted in something income can't fix — loss, depression, broken relationships, meaning — then earning more will not help, and may even worsen the gap between your external life and your internal one.

The corollary is also true. For people whose unhappiness is financially rooted — debt, instability, fear of an unaffordable medical event — the well-being return on each marginal dollar is much higher than the population average suggests. These are the people who benefit most from any tool that reduces financial stress.

The honest limitations

Both studies are correlational. Higher-income people differ from lower-income people in many ways besides income — education, health, social network, occupation. The studies adjust for some of these and not others.

Both also rely on self-reported well-being, which has known limitations: cultural differences in how people rate emotions, scale-use biases, time-of-day effects. Killingsworth's experience sampling reduces some of these but introduces others — people who agree to be pinged are not a random sample of working adults.

Most importantly: a difference in average well-being between income brackets is not a guarantee that your own well-being will rise if your income does. The research describes population-level patterns, not individual destinies.

What this means for you

Three honest takeaways. First, the “$75,000 plateau” is no longer a defensible reading of the evidence — for most people, more income keeps helping well past that number. Second, the mechanism is mostly about reduced financial stress and increased autonomy, not consumption — which means the well-being return on a higher income comes mainly from not spending the raise, not from spending it.

Third, if you are currently financially stressed, the evidence is unusually clear that reducing that stress will buy you more happiness per dollar than almost anything else. That is a useful piece of information, and it isn't the message most personal-finance content delivers.

References

1. Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences, 107(38), 16489–16493. https://doi.org/10.1073/pnas.1011492107
2. Killingsworth, M. A. (2021). Experienced well-being rises with income, even above $75,000 per year. Proceedings of the National Academy of Sciences, 118(4), e2016976118. https://doi.org/10.1073/pnas.2016976118
3. Killingsworth, M. A., Kahneman, D., & Mellers, B. (2023). Income and emotional well-being: A conflict resolved. Proceedings of the National Academy of Sciences, 120(10), e2208661120. https://doi.org/10.1073/pnas.2208661120

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