Does earning more money make you happier? According to recent research, certain income levels do make people happier, but there's a twist in the findings (more on that below).

The study, conducted by researchers at Purdue University on more than 1.7 million people as part of the Gallup World Poll found that, in every region of the world, people with higher incomes are indeed happier.

For the U.S., it's no different. A person making $120,000 or $200,000 is likely to report more happiness with their lives than the person pulling in $40,000.

A twist: Life satisfaction stops after you make a certain amount

The research found the optimal income for life satisfaction in North America is $105,000 per year. If your income exceeds that amount, it has been found that whatever you make beyond that level is not associated with greater life satisfaction. In fact, it reduces life satisfaction.

This $105,000 income cutoff is what's called the "satiation point." A person pulling in $250,000 is no happier or satisfied with his or her life than a person making $110,000. 

This study had global ramifications: In many other regions of the world, when incomes rise above the cutoff level for that particular country, life satisfaction gets lower. In Australia and New Zealand, for example, the satiation point is $125,000; and in Latin America and the Caribbean, it's $35,000. (This chart shows the satiation point for different areas of the world in U.S. dollars.)

similar study conducted in 2010 by Nobel prize-winning economist Angus Deaton and psychologist Daniel Kahneman found the satiation point for individuals in the U.S. then was approximately $75,000 (adjusted to around $84,000 in 2016 dollars, according to this Quartz report).


To recap, the optimal salary for attaining life satisfaction in North America is individual income of $105,000. Once this threshold is reached, further increases in income are actually associated with reduced happiness. (Note: The research also finds that a range of $65,000 to $95,000 is needed for emotional well-being in the U.S. "Emotional well-being" in this case refers to a person's day-to-day feelings such as happiness, sadness, excitement, or anger.)

This new survey, however, has found its share of critics who question its accuracy. Dan Sacks, an economist at Indiana University who studies the relationship between income and subjective well-being, isn't convinced of the results. He tells Quartz that the research "relies on flawed survey questions."

He references previous research that suggests that just because people say they make a certain amount of money in self-reported polls, it doesn't mean they actually do. 

There's also the probability of people answering poll questions about their happiness differently on different days. Someone having a bad day at work one day will have answered the same question differently on a better day. "This measurement error," states the Quartz report, "makes it difficult for researchers to assess the income-happiness relationship with great accuracy."

That leaves room for a lot of questions and doubts. What's your take? Are you more or less satisfied with your life with an income higher than $105,000 per year?