How much money's enough to be happy?

Nobel Prize-winning economist Daniel Kahneman finds the 'happiness plateau' of money - enough money to need no more to make her or him happy - in the US has climbed over six times in a decade from around $75,000 in 2010 to $500,000 in 2021. A person in the US is found accelerating her or his happiness at an annual income of $100,000 - ₹82 lakh at the current exchange rate and ₹23.12 lakh by purchasing power parity (PPP). Critically, though, the point at which money ceases to matter for happiness - at annual incomes above $500,000 - places 99% of the US population below the threshold. Which effectively means money continues to make most of mankind happy. If this is, indeed, the case, society would be better off keeping people on the treadmill all the time.

Kahneman's revised findings are intriguing and counter-intuitive. It should not take half-a-million dollars for people to be inured to health and emotional experiences. Finland, with the latest available per-capita income of around $56,000 in PPP, heads the World Happiness Index, a cross-country list released annually by a multidisciplinary group of social scientists. The index is compiled by asking respondents to evaluate their lives against a variety of economic and non-economic factors. Bhutan, which coined the phrase gross national happiness, pursues development goals that give equal importance to non-economic aspects of well-being. This subjective assessment relies on a cultural approach to life experiences.

By confronting his original research, Kahneman is making a powerful argument for economic factors in individual and societal development. Just as his previous work had weighed in on non-economic well-being. If, in time, behavioural economics establishes a stronger link between money and happiness, it should settle somewhere closer to the age-old wisdom that you can't buy it. The greater interest will remain on the effects of lack of money on misery and the policy trade-offs those entail. As the other Marx - Groucho - said, 'Money frees you from doing things you dislike.'