Does money buy happiness in advanced economies?

What is it about?

This study explores whether more money always makes people happier. Using data from 155 countries between 2005 and 2023, we examine how income relates to people’s life satisfaction and emotions. We find that in wealthier countries, happiness first rises with income but eventually falls once people become very rich, a pattern we call “misery at the top.” Beyond a certain point, extra income may bring stress, social comparison, or loss of personal freedom that outweigh material comfort. In contrast, in developing countries, happiness generally continues to increase as incomes rise, because more money still helps meet basic needs. The research highlights how social support, freedom, and trust in institutions play a key role in turning money into genuine well-being.

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Why is it important?

This work challenges the long-held belief that economic growth automatically leads to greater happiness. By showing that well-being can actually decline at very high income levels, it calls for a re-evaluation of how societies measure progress. Policies focused only on GDP growth may miss what truly matters for people’s quality of life, autonomy, trust, and social connection. The study provides an evidence-based foundation for developing new economic and social policies that aim not just to make countries richer, but also to make people’s lives more fulfilling.

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