Does $36,000 Buy Happiness?

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In the very poorest places in the world, life satisfaction predictably increases along with the wealth of the country. Surprisingly, the same doesn’t seem to hold true for wealthier countries. Instead, life satisfaction appears to peak at about $36,000 GDP per capita, a new study suggests. Even more surprising, it seems to dip slightly after that.

The researchers attribute it to what they call “the aspiration gap,” but most people know it as keeping up with the Joneses.

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“This aspiration gap — the difference between actual income and the income we would like — eats away at life satisfaction levels,” said study co-author economist Eugenio Proto of the University of Warwick. “In other words, what we aspire to becomes a moving target and one which moves away faster in the richest countries, causing the dip in happiness we see in our analysis.”

The researchers culled their data from the World Values Survey and GDP figures. In countries where the GDP per capita is under $6,700, people were 12 percent less likely to report maximum life satisfaction than people who live in countries with a GDP per capita of $18,000.

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But the change in life satisfaction between countries with $20,400 GDP per capita and $54,000 GDP per capita varied by only 2 percent. The drop in life satisfaction appeared in countries beyond a level of GDP per capita of around $36,000.

Countries don’t necessarily need to stop trying to attain wealth, however. People often say they would still prefer to live in a wealthier country, even if it meant a lower level of life satisfaction, the researchers said.

Photo: iStock