Nobel laureate and founder of behavioral economics Daniel Kahneman performed a TED Talk this year about how as humans our “experiencing selves” and our “remembering selves” perceive happiness differently. Basically, he says that our memories of experiences differ from what really happened during the experience itself.
But what ended up being the catchy soundbite was in the Q&A session after his talk, where he tells us that while millions of dollars won’t buy you happiness, a job that pays $60,000 a year might help. This is based on a survey of 600,000 Americans:
“Below 60,000 dollars a year, people are unhappy, and they get progressively unhappier the poorer they get. Above that, we get an absolutely flat line. I mean I’ve rarely seen lines so flat.”
“Clearly… money does not buy you experiential happiness, but lack of money certainly buys you misery,” he said. But the real trick, Kahneman said, is to spend time with people you like.
I found this talk through the GatesVP blog, who offers this analysis:
In most parts of the US you already have access to a very good and healthy life at 60k. You’ve pretty much covered everything commonly deemed as a necessity and you probably have some money left over for “entertainment”. So the jump to 90k really just gives you a little more “entertainment” and maybe some bigger stuff, but that’s it.
And if you’re the type who’s not happy with being in the top 20%, then how much further do you need to go? Top 10%? Top 5%?
Really, 60k for one job is far enough “ahead of the game” to keep happy those that can be kept happy. And that’s probably why this is true.
According to the 2008 US Census, making 60k a year is in the top 20%. I pretty much agree, especially with the idea that humans are creatures of comparison. As long as we’re doing a little bit better than our neighbors, then we tend to be happy. What do you think?
You can view the entire TED Talk below. The Q&A session starts at about 17:15, and a transcript is available on the right sidebar here.