The scholars who research happiness suggest that more money stops making people happier at a family income of around seventy-five thousand dollars a year. After that, what economists call "diminishing marginal returns" sets in. If your family makes seventy-five thousand and your neighbor makes a hundred thousand, that extra twenty-five thousand a year means that your neighbor can drive a nicer car and go out to eat slightly more often. But it doesn't make your neighbor happier than you, or better equipped to do the thousands of small and large things
Research on happiness indicates that family income beyond approximately seventy-five thousand dollars does not significantly increase happiness. Economists refer to this phenomenon as "diminishing marginal returns." When a family's income reaches this threshold, additional earnings tend to contribute less to overall well-being, as the differences in lifestyle choices do not translate into increased joy.
For instance, a family earning seventy-five thousand may see their neighbor with a hundred thousand enjoying certain luxuries, like a nicer car or more dining out. However, these financial advantages do not necessarily result in greater happiness for the neighbor. This insight challenges the conventional belief that more money directly correlates with enhanced happiness, emphasizing that well-being stems from various factors beyond income.
