High Income Improves Evaluation of Life but Not Emotional Well-Being
Daniel Kahneman, Angus Deaton
Proceedings of the National Academy of Sciences · 2010
Abstract
Distinguishes two concepts of well-being—how people evaluate their life overall versus their day-to-day emotional experience—and asks how each relates to income.
Methodology
Analysis of more than 450,000 US survey responses (Gallup-Healthways), separating life evaluation (a ladder rating) from experienced emotional well-being measured for the prior day.
Findings
Life evaluation rises steadily with log income without an obvious satiation point, but day-to-day emotional well-being improves with income only up to roughly $75,000 per year and then plateaus. Money buys a better assessment of one's life more than it buys better moods.
Applied nudge
Match the outcome to the metric: financial gains reliably move how people rate their life, but past a threshold they do little for daily mood—optimize for the well-being dimension you actually intend to affect.
Citation
Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. PNAS, 107(38), 16489-16493.
↗ Source page