Kahneman resolves conflict on income-wellbeing study, finds point at which unhappiness stops decreasing for unhappy people

March 8, 2023

Daniel Kahneman and Angus Deaton, both professors at Princeton University and Nobel Prize laureates, published a landmark paper in 2010 that showed that a rise in income increased people's well-being, but only to a ceiling of $75,000, beyond which there was no increase in well-being. Much was made of these findings about the link between "happiness" and income in the popular press. Then a decade later, researcher Matthew Killingsworth, Senior Fellow at the University of Pennsylvania, published work calling this finding into question, showing that well-being rises with income even about $75,000 per year. 

Through a new adversarial collaboration, Kahneman and Killingsworth, with University of Pennsylvania's Barbara Mellers, uncover new insights from the original data of each and suggest that questioning conventional practices in the social sciences might eliminate these errors in future studies.

The creators of the two original studies did agree on a number of things: They believed that both original works had attempted to measure the same thing--emotional well-being; 2) That the methods each used were good and compatible; 3) Killingsworth's follow-up study provided a more sensitive measure of well-being; and 4) Kaheman and Deaton's flattening data was a robust feature that should have appeared in Killingsworth's data. Given those points of agreement, their goal was to search for where in Killingsworth's data the flattening pattern appeared.

Along the way, the researchers recognized that the data set that Kahneman and Deaton orginally analyzed was actually more of an instrument of unhappiness than happiness. Instead of the original conclusion that "Happiness rises with income, but there is no further progress beyond $75,000," it more accurately was showing that an increase of income staved off unhappiness for a while but not after the flattening point. 

With this new insight, the team looked at the data from the least happy 20 percent of Killingsworth's respondents, finding the flattening of the happiness curve where the Kahneman-Deaton would have anticipated finding it, adjusted for inflation.

As the authors of the collaboration state, especially for those who are already unhappy: "This income threshold may represent the point beyond which the miseries that remain are not alleviated by high income. Heartbreak, bereavement, and clinical depression may be examples of such miseries."

While this new conclusion about the relationship of income to well-being is getting wide coverage, the important finding of this adversarial collaboration to behavioral science is that it is worthwhile to take a look at your assumptions and standard practices. Kahneman and Deaton had interpreted their data as measurements of wellbeing or happiness, when in reality the construct was measuring the lack of wellbeing or happiness. Killingsworth had made the standard assumption that affect of one more dollar to the perceived well-being of the most happy people and the most unhappy people would be the same. 

After reanalyzing both sets of data, the team--which included an outside voice in the form of the and other reviewers--came up with a new and more nuanced conclusion: Money can keep buying happiness for already happy people, but among the most unhappy, the money helps stave off unhappiness only to a point.


Access the new paper at:

Killingsworth, M.A., Kahneman, D., & Sellers, B. (2023). Income and emotional well-being: A conflict resolved. Proc. Natl. Acad. Sci. https://doi.org/10.1073/pnas.2208661120

Based on the earlier work:

Kahneman, D. & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proc. Natl. Acad. Sci. U.S.A.107, 16489–16493. https://doi.org/10.1073/pnas.1011492107

Killingsworth, M.A. (2021). Experienced well-being rises with income, even above $75,000 per year. Proc. Natl. Acad. Sci. U.S.A. 118, e2016976118. https://doi.org/10.1073/pnas.2016976118