Happiness, income satiation and turning points around the world

Abstract

Income is known to be associated with happiness¹, but debates persist about the exact nature of this relationship^2,3. Does happiness rise indefinitely with income, or is there a point at which higher incomes no longer lead to greater well-being? We examine this question using data from the Gallup World Poll, a representative sample of over 1.7 million individuals worldwide. Controlling for demographic factors, we use spline regression models to statistically identify points of ‘income satiation’. Globally, we find that satiation occurs at $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being. However, there is substantial variation across world regions, with satiation occurring later in wealthier regions. We also find that in certain parts of the world, incomes beyond satiation are associated with lower life evaluations. These findings on income and happiness have practical and theoretical significance at the individual, institutional and national levels. They point to a degree of happiness adaptation^4,5 and that money influences happiness through the fulfilment of both needs and increasing material desires⁶.

Jebb et al. use data from the Gallup World Poll to show that happiness does not rise indefinitely with income: globally, income satiation occurs at US$95,000 for life evaluation and US$60,000 to US$75,000 for emotional well-being.