“Happiness does not depend on what you have or who you are; it solely relies on what you think.” This sentiment by Buddha perfectly encapsulates a widespread belief that happiness is a state of mind. However, a recent study offers a more nuanced perspective, revealing that happiness might have a price tag after all — and it varies by city.
The ancient debate on whether money can buy happiness has evolved over the years. It is no longer about whether money can make you happy, but rather how much money is needed to make you happy. Previous studies, such as the one conducted by Daniel Kahneman and Angus Deaton, suggested that money does boost emotional well-being but only up to a point, approximately $75,000 annually per individual. Beyond that, extra dollars do not equate to extra happiness.
More recently, a study from Purdue University, referenced by S Money, took this research further by identifying a global average ‘satiation point’ of $60-75,000, beyond which additional income does not lead to increased life satisfaction. This study, based on Gallup World Poll figures from over 1.7 million people in 164 countries, found substantial variation across world regions, with satiation occurring later in wealthier areas. The researchers believe this data could prompt individuals to reevaluate their values and goals, encourage employers to offer fairer compensation, and assist governments in legislating towards equitable wealth distribution.
To provide a practical, daily perspective on how money might impact happiness, S Money converted the Purdue study’s figures into local currencies, accounting for purchasing power and local living costs. This adjustment reveals that your happiness per dollar greatly depends on where in the world you are spending it.
So, how does the cost of happiness vary by city?
While the study does not detail individual cities, it implies that the cost of happiness varies significantly by region, with wealthier areas requiring a higher income for satiation. This variation could be attributed to multiple factors, including the cost of living, societal norms, and local economic conditions.
For example, in cities with a high cost of living, such as New York or London, the income required to reach the ‘happiness threshold’ might be significantly higher than in cities with a lower cost of living, like Lisbon or Bangkok. Similarly, in regions with strong social safety nets and robust public services, individuals might reach the happiness threshold at a lower income level compared to areas without such support.
Ultimately, the cost of happiness is not a one-size-fits-all concept. It is influenced by various factors, including where you live. While money undoubtedly plays a role in our overall well-being, it is essential to remember that it is just one piece of the puzzle. As the Harvard-affiliated study suggests, how you spend your money can be just as crucial as how much you earn. Buying more experiences and fewer material goods, and paying close attention to the happiness of others, are just a couple of the principles that can help consumers get more happiness for their money.
The cost of happiness varies by city and region, influenced by factors such as the cost of living, societal norms, and local economic conditions. While money plays a role in our well-being, how we spend it is equally important. Adopting a mindful approach to spending, focusing on experiences rather than material possessions, and caring for others’ happiness can lead to a more fulfilling life, regardless of your income level.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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