Uh-oh, New Research suggests that Money DOES buy Happiness (but apparently not for everyone)

Are you that "everyone?"

For years, people repeated the same conclusion with a kind of certainty.

Money helps — but only up to a certain point.

That point was often quoted as around $75,000 a year. Beyond that, we were told, earning more money might improve how people evaluate their lives, but it would not really improve how they feel in daily life.

That idea came from a landmark 2010 paper by Daniel Kahneman and Angus Deaton, which found that emotional well-being rose with income and then appeared to level off around that threshold, while life evaluation kept rising.

It was neat. Memorable. Easy to repeat.

But it also turned out to be incomplete.

In 2021, Matthew Killingsworth published a new study using a different method. Instead of relying on people’s retrospective reports about how they felt yesterday, he used real-time experience sampling from a large U.S. sample. His finding was striking:

Experienced well-being kept rising with income, even above $75,000, with no evidence of a plateau at that level.

Now that created a conflict.

For some time now there's been an ongoing debate in the academic world - does money stop helping after a certain point? Or did more income continue to improve emotional well-being?

And the question still remained - does money really buy happiness?

The 2010 study - Money only buys happiness up to a point.

The 2010 Kahneman and Deaton paper distinguished between two things:

Life evaluation — how good people think their life is overall.

Emotional well-being — the quality of people’s day-to-day emotional experience.

Their results suggested that life evaluation continued to rise with income, but emotional well-being reached a ceiling at about $75,000 per year. They also noted that low income amplified the emotional pain associated with difficulties like ill health, divorce, and being alone.

This is part of why the study became so influential. It seemed to support a very intuitive idea:

Money can reduce hardship, but after a certain level of comfort, it stops buying emotional improvement.

This led to the next study

What the 2021 study changed - more money keeps wellbeing rising.

Killingsworth’s 2021 study challenged the plateau idea directly.

Using over a million real-time reports of how people were feeling, the paper found that both experienced well-being and evaluative well-being increased linearly with log income, and that the slope above roughly $80,000 was about as steep as below it.

There was no evidence for a plateau around $75,000 in that dataset.

This change in the experiment matters alot because real-time experience sampling is often seen as a more direct way of measuring moment-to-moment emotional life. It does not rely as heavily on memory, global judgment, or simplified recall.

And here's what it looks like below.

So at that point the field seemed split between two narratives:

One said that emotional well-being rises and then flattens.

The other said it keeps going up.

Which is it?

What the 2023 paper resolved

In 2023, Kahneman (from study 1), Killingsworth (from study 2), and Barbara Mellers worked together in what they called an adversarial collaboration to resolve that disagreement.

Criticisms of 2021 study argues that the measure used to measure happiness i.e. emotional well-being, was in practice picking up the unhappy end of the emotional spectrum more strongly than general happiness across the full range.

In other words, it may have been better at detecting the reduction of distress than the growth of flourishing.

Their joint paper, Income and emotional well-being: A conflict resolved, argues that the contradiction was partly a matter of what exactly was being measured and for whom. Their conclusion was more nuanced than either of the simpler headlines that came before it.

When relooking at the data from this new lens, the 2023 reconciliation paper found that both earlier studies had captured part of the truth. On average, larger incomes are associated with higher emotional well-being. But that average hides an important difference across people.

The cleanest and most easiest summary is this:

Happiness rises with income for most people — but levels off for those who are already deeply unhappy.

That is the key update.

According to the joint paper, the least happy group showed a steep rise in happiness up to about $100,000, after which there was little further increase.

People in the middle range of emotional well-being showed a more linear rise with income. And for the happiest group, the association between income and happiness even appeared to accelerate above $100,000.

The 2023 Princeton study adds another useful interpretation: for the least happy roughly 20% of people, the threshold may mark the point beyond which the remaining forms of suffering are no longer alleviated by higher income.

The authors gave examples like heartbreak, bereavement, and clinical depression.

That is a much more interesting conclusion than either “money buys happiness” or “money stops mattering.”

So does money buy happiness?

The updated answer is:

Yes, but unevenly so.

Money seems to help in at least three ways.

First, it reduces forms of distress that come from material conditions: financial insecurity, unstable housing, lack of choice, time pressure, and chronic everyday stress. The 2010 study itself found that lower income was associated with more emotional pain in the face of life difficulties.

Second, money appears to support better emotional well-being for most people well beyond bare sufficiency. The 2021 paper found no plateau at the famous $75,000 threshold, and the 2023 paper concluded that for most people, happiness does continue to rise with income.

Third, money does not operate the same way for everyone.

For some people, more income removes real constraints and opens up more ease, freedom, and control. For others, especially those who are already deeply unhappy, income helps only to a point because the remaining pain is not mainly financial.

So the better question may not be “Does money buy happiness?” but rather:

What kind of suffering is money able to relieve — and what kind does it leave untouched?

Why happier people may get happier with more money

This part can sound unfair upon the first glance.

Why would people who are already doing relatively well seem to continue benefiting from more money?

The paper’s answer is not that happy people are simply greedy, nor that money creates happiness from nothing.

It is that income may keep improving daily life when the barriers to well-being are mainly external rather than deeply internal. The happiest group in the 2023 analysis showed gains that continued, and even accelerated above $100,000.

A reasonable interpretation is that money works especially well when it enters a life that is already somewhat functional. It can buy time, flexibility, convenience, safer neighborhoods, better healthcare access, relief from daily hassles, and more opportunities to spend in ways that align with one’s values. This is an inference from the paper’s pattern rather than a direct statement from the authors, but by my own reckoning fits the findings.

In contrast, if someone is already deeply unhappy because of grief, isolation, depression, trauma, or relational pain, income may improve comfort without changing the emotional core of their suffering.

The Princeton summary explicitly points in this direction.

Why the earlier result was not exactly wrong

The 2023 paper does not simply declare the 2010 study mistaken. It reframes it.

The earlier finding captured something real:

Among the least happy people, there does appear to be a threshold after which more income no longer reduces unhappiness much.

What changed is the recognition that this is not the whole population pattern.

It is one part of it.

So the conflict was resolved not by proving one side entirely right and the other entirely wrong, but by showing that the relationship between income and emotional well-being is heterogeneous. There is no single curve that describes everyone equally well.

What this means in real life

The study gives us a more grounded way to think about money.

Money matters. It is not shallow to say that. Financial strain is psychologically costly, and relief from that strain can improve daily emotional life in meaningful ways.

But money is not a universal solvent.

It can reduce pressure. It can increase options. It can create breathing room.

What it cannot reliably do is heal every kind of misery.

If the deepest pain in a person’s life comes from loneliness, unresolved trauma, bereavement, depression, emptiness, or a lack of meaning, then higher income may improve the scenery without changing the center of experience. That interpretation is strongly consistent with the 2023 reconciliation and with the examples highlighted by Princeton.

That makes the updated answer more human than the old slogan.

Not “money does not buy happiness.”

Not “money buys endless happiness.”

But something closer to this:

Money helps most when money is what hurts. And it helps less when the pain lives somewhere deeper.

Final takeaway

The older 2010 study told us that emotional well-being seemed to flatten around $75,000, while life evaluation kept rising. The 2021 study challenged that and found no such plateau in real-time reports. The 2023 joint paper reconciled the two by showing that the pattern differs across people: for most people, emotional well-being rises with income; for the least happy group, the benefits appear to level off around $100,000.

So yes, money can buy some happiness.

But more precisely, it can buy relief, freedom, and room.

And whether that becomes happiness depends partly on what kind of suffering remains once money has done all it can do.