We've all heard the clichÃƒÂ©d phrase, "money can't buy happiness." Proponents of this argument argue that the things in life that truly cause happiness (i.e. love, family, etc.) cannot be bought. As a result, any additional income (past a certain point) will not increase happiness or general satisfaction with life. Furthermore, a study by Nobel winning psychologist, Daniel Kahneman and economist Angus Deaton shows that emotional wellbeing increases with increasing income, but plateaus after an annual income around $75,000. The authors argue that this is due to the fact that those with low income are more likely to deal with "divorce, ill health, and being alone."
Despite this plateau, I argue that a new study published by the Brookings Institute suggests that money can in fact lead to happiness. This is not due to the increased ability to buy material items, but rather because of increased life expectancy. After all, you can't be happy if you're not alive. The study calculated average expected life expectancy for those born in 1920 and 1940 based on their incomes at 55 years old. For example, a 55-year-old woman born in in 1920 whose income was between the 51st and 60th percentiles could expect to live for an additional 29.9 years, or to the age of 84.9. According to the data, life expectancy increased at each increasing level of income. And the differences can be drastic. Take two men born in 1940, one in the poorest ten percent, and one in the richest. The man in the poorest ten percent has a life expectancy (24.2 years) that is 10.7 years less than that of the richer man (34.9 years). While the richer man may be no happier than the poorer for the duration of each of their lives, he has 10.7 more years in life expectancy in which he can be happy. Ultimately, while money may not be able to buy you happiness, it can buy you time during which you can be happy.