The Magic Income Number

What’s the magic income number? According to Angus Deaton and Daniel Kahneman, it’s about $75,000, at least when it comes to day-to-day happiness. “As people earn more money, their day-to-day happiness rises,” reports The Wall Street Journal. “Until you hit $75,000. After that, it is just more stuff, with no gain in happiness.” Income above $75,000, however, does improve people’s overall “life assessment.” “Giving people more income beyond 75K is not going to do much for their daily mood … but it is going to make them feel they have a better life,” says Mr. Deaton. [%comments]

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  1. Brett says:

    I’m assuming this is $75k at the average US cost of living… I live in NJ and $75k is barely enough to get by for a small family. When monthly rent is $1500-$2000 per month for a small 2-bedroom apartment, these numbers just don’t seem to add up.

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  2. FluidITguy says:

    Congrats on deal with WNYC. Anyhoo… anything above 75k won’t make you feel happier? I haven’t sat down to gauge my mood when I was making less so how is this accurate? How many people sit down and do a self analysis and associate happiness with income levels?

    Anything above 75k for me = more money going into retirement. I do not splurge… I have a Hyundai, live a mediocre neighborhood.. all to save money. My mood is ‘content’ when it comes to income but ‘annoyed’ when it comes to living where I live.

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  3. I Hate Overgeneralizations says:

    Yeah, but what’s the magic number in Manhattan? I bet it’s a tad higher than $75,000.

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  4. James says:

    I wonder how many of the survey respondents live in NYC. With a household income of around $250K and two children, and student loans, my partner and I feel like we’re making just enough to not worry about money. We’re happy, but for us the magic number is definitely not $75K.

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  5. Rick A says:

    Too bad that number is out of reach for so many people in this country, who would probably be content with half of that.

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  6. Traciatim says:

    The median individual income for 2006 for all non-zero income earners above age 25 was $32,140.

    Why don’t they just declare the happiness return on income cutoff to be twice the median individual income?

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  7. rob rob says:

    When you desire an object, and identify with the desire, the desire causes anxiety. When the desire is satisfied the anxiety reduces and thus we return to our natural state until the next carrot and stick cycle commences once more.

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  8. Diana says:

    There are so many variables that need to be included in this type of assessment. Demographics mainly. $75K may be suitable for a single person with an average cost of living, but there are many who have families to take care of as well as additional expenses.
    Lifestyle is another variable – some need fancier items than others. But happiness and “daily mood” are tough to gauge. There are numerous items that affect how happy people are, and using $75K as a benchmark seems rather speculative.

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