Money can't buy you love, but what about happiness? Purdue research says yes, to a point

The Beatles sang money can’t buy you love, but new research at Purdue University suggests it sure can help make you happy — at least to a point.

The perceived positive relationship between income and happiness is no secret. It helps explains why the Hoosier Lottery took in more than $1.2 billion in fiscal year 2017.

The questions Andrew T. Jebb and three other researchers set out to answer were more specific:

• How much money does it really take to be happy?
• Is there a point where money no longer changes feelings of well-being?

Their answers were published in January by Nature Human Behavior. The senior author on the paper is Louis Tay, an assistant professor of psychological sciences. Ed Diener and Shigehiro Oishi from the Department of Psychology at the University of Virginia also contributed to the study.

Some of their findings may come as a surprise.

“It’s pretty well known that greater income is associated with greater levels of happiness,” said Jebb, the lead author and a doctoral student in the Department of Psychological Sciences.

“The question is does that continue forever, or does it eventually stop at some point?”

Using data from world-wide polling, the study found there is an optimal income when it comes to making an individual happy. And not surprisingly, that number varies for people around the world.

But the research also found feelings of happiness and satisfaction don’t always continue to rise with income.

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“That might be surprising as what we see on TV and what advertisers tell us we need would indicate that there is no ceiling when it comes to how much money is needed for happiness, but we now see there are some thresholds,” said Jebb.

“It’s been debated at what point does money no longer change your level of well-being. We found that the ideal income point (globally) is $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being. Again, this amount is for individuals and would likely be higher for families.”

Data that was examined for North America, which includes the U.S. and Canada, found slightly higher thresholds: $65,000 to $95,000 for emotional well-being (positive or negative feelings) and $105,000 for life evaluation (a cognitive assessment of how satisfied you are with your life).

That’s not necessarily good news for the more than 2.1 million men and women who work full-time, year-round jobs in Indiana.

Census data shows the average earnings (before taxes) in 2016 for those Hoosiers was about $53,000. And the news is even worse for women, who averaged about $43,000 in annual earnings.

Overall, more than 75 percent of Hoosier workers earned less than the $65,000 threshold for emotional well-being, while only about 9 percent earned more than $100,000 that reflects the optimum for a positive life evaluation.

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Emotional well-being, or feelings, is about one’s day-to-day emotions, such as feeling happy, excited, or sad and angry,” Jebb explained. “Life evaluation, really life satisfaction, is an overall assessment of how one is doing and is likely more influenced by higher goals and comparisons to others.”

The research also found “there’s a certain point where money seems to bring no more benefits to well-being in terms of both feelings and your evaluation,” Jebb said.

“If you go past that point, that it levels off and there’s no more benefit, then it actually can decrease. Its not to say for everyone. These are broad findings, but that’s what we found.”

The paper suggested it may not be the higher income, but rather the other “costs” — time demands, workload, responsibility and loss of leisure time — associated with earning that larger paycheck.

Jebb said there has been a lot of research linking income to happiness, but there weren’t any strong, conclusive results when it comes to specific amounts or a potential stopping point.“This is kind of like an open thing that people had wondered about and talked about, hypothesized, but it just had never really been done, especially with a large-scale global data set like we had access to,” he said.

The findings likely won’t cut into lottery sales or scammers trying to fleece people looking for a get-rich-quick scheme. But Jebb said there’s more to life — and happiness — than just a big pile of cash.

“Lottery winners, after that initial burst of excitement and happiness, they’re on average, long-term no more happy than average people,” he said. “And even people living with lower levels of income, near poverty, can actually have high levels of well-being. It’s a complicated thing. Money is one piece of the puzzle, being able to fill your needs and material desires, but there are other things, too, with something as complicated as happiness.”

Contact Tim Evans at (317) 444-6204 or tim.evans@indystar.com. Follow him on Twitter: @starwatchtim