Indeed money does buy happiness, but not when incomes go above 75,000 dollars a year, a new study has revealed.
The research by Princeton University's Daniel Kahneman, a 2002 Nobel economics laureate, and colleague Angus Deaton, concluded that up to a point, people's "life evaluation" and emotional well-being increased with higher incomes.
The latest study adds a new element to a long-running debate among academics and others on whether money can buy happiness -- the definition of which can be elusive.
"We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being," the researchers write in the Proceedings of the National Academy of Sciences.
They said the effect of income on the emotional dimension of well-being "satiate fully at an annual income of around 75,000 dollars."
"More money does not necessarily buy more happiness, but less money is associated with emotional pain. Perhaps 75,000 dollars is a threshold beyond which further increase in income no longer improve individuals' ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure."
The research was based on an analysis of responses to 450,000 responses to the Gallup-Healthways Well-Being Index, a daily survey of US residents conducted by the Gallup Organization in 2008 and 2009.
The level of 75,000 dollars was just above the median income of 71,500 dollars for US households in 2008.
"It also is likely that when income rises beyond this value, the increased ability to purchase positive experiences is balanced, on average, by some negative effects," Kahneman and Deaton said.
They said a recent psychological study suggests that people with high incomes show "a reduced ability to savor small pleasures."
Deaton said in a commentary on the research that "emotional well being leveled off at 75,000 dollars a year ... above a certain income level, people?s emotional well-being is constrained by other factors, such as temperament and life circumstances."
But he noted that as income decreased from 75,000 dollars, "people reported decreasing happiness and increasing sadness and stress."
"The pain of life's misfortunes, including disease, divorce, and being alone, is exacerbated by poverty. In other words, being divorced, being sick, and other painful experiences have worse effects on a poor person."