Tuesday, January 09, 2007

Income and Happiness

Christoper Shea wrote a column in the Boston Globe a few months ago (Oct 15, 2006). This is the passage I found particularly relevant:
Several economic studies affirm that the correlation of income and happiness is nowhere near what people think. One finds that in developed societies there is slightly more happiness at the 75th percentile of income than at the 50th, but that above the 75th percentile more money doesn’t matter.
This of course begs the question of where on the scale of income you are. In this case, I'm actually going to cite Wikipedia, because this article has charts taken directly from the US Census site and the original Census pages are .pdfs (easily found by Googling "income percentile census" or such). In 2006, households at the 75th percentile were earning $77,500 a year.

Of course the argument about happiness has to do with basic comfort levels being met and then envy for material things versus time and peace of mind. This means that your happiness will also vary a lot based on the cost of living where you live and the people you hang out with (those charts break income down by race, for example).

In related links, financial columnist Scott Burns also has a chart on his site that cites the level of prosperity based on net worth, something most easily figured out if you're using Quicken or another household accounting program.

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