Higher income improves life rating but not emotional well-being

By Staff on Sept. 3, 2010, 5:14 p.m.

People's life evaluations rise steadily with income, but their reported quality of emotional daily experience levels off at a certain income level, according to a new study by two Princeton University professors.

Daniel Kahneman, a senior scholar in the Woodrow Wilson School of Public and International Affairs and the Eugene Higgins Professor of Psychology Emeritus, and Angus Deaton, the Dwight D. Eisenhower Professor of International Affairs and professor of economics and international affairs, analyzed more than 450,000 responses from 2008 to 2009 to a daily survey of 1,000 randomly selected U.S. residents. The researchers found that respondents' rating of their own lives rose steadily with annual income, but their emotional well-being -- a measure of the quality of their everyday experiences -- did not improve beyond approximately $75,000 a year.

The study, which was published online Sept. 6 by the Proceedings of the National Academy of Sciences, extends pioneering work by Kahneman, a Nobel laureate, that has found satisfaction does not necessarily increase in proportion to an improved financial status. To read more, visit the Wilson School website.
 

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