Daniel Kahneman, Nobel Prize Winner: Happiness Can Be Bought For About $60,000 Per Year (VIDEO)

Money can't buy happiness -- but lack of it can certainly make you progressively miserable, says one Nobel Prize-winning economist.

Daniel Kahneman, one of the founders of the now-popular field of behavior economics, delivered a fascinating TED talk earlier this year entitled "The Riddle of Experience vs. Memory," and got into an interesting discussion with TED host and curator Chris Anderson. (Hat tip to GatesVPblog via My Money Blog.)

Arguing that experience is essentially divided into the "experiencing self" and the "remembering self," Kahnemen suggests that happiness is essentially an act of deftly balancing the two. (They don't always match up, it turns out.) Here's Kahneman:

We know something about what controls satisfaction of the happiness self. We know that money is very important, goals are very important. We know that happiness is mainly being satisfied with people that we like, spending time with people that we like. There are other pleasures, but this is dominant. So if you want to maximize the happiness of the two selves, you are going to end up doing very different things. The bottom line of what I've said here is that we really should not think of happiness as a substitute for well-being. It is a completely different notion.

After the speech, Anderson pointed to the result of a 2009 Gallup survey that compared rates of depression to income levels. Here's the exchange:

Chris Anderson: Thank you. I've got a question for you. Thank you so much. Now, when we were on the phone a few weeks ago, you mentioned to me that there was quite an interesting result came out of that Gallup survey. Is that something you can share since you do have a few moments left now?

Daniel Kahneman: Sure. I think the most interesting result that we found in the Gallup survey is a number, which we absolutely did not expect to find. We found that with respect to the happiness of the experiencing self. When we looked at how feelings vary with income. And it turns out that, below an income of 60,000 dollars a year, for Americans, and that's a very large sample of Americans, like 600,000, but it's a large representative sample, below an income of 600,000 dollars a year...

CA: 60,000.

DK: 60,000. (Laughter) 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, what is happening is money does not buy you experiential happiness, but lack of money certainly buys you misery, and we can measure that misery very, very clearly. In terms of the other self, the remembering self, you get a different story. The more money you earn the more satisfied you are. That does not hold for emotions...

WATCH the full talk (the exchange with Anderson happens around the 18-minute mark):

Comments

[Sophea No]

06:31 PM on 06/27/2010

I think happiness can also be understanding with your partner very well. Is also if you have a good health, good education, good family, and good job. But if you have only money, but you are so lonely, you have not happiness.

[jeanneyogini]

09:22 PM on 06/22/2010

I think happiness can also be correlated to how much one is connected to the inner depths of their own Being. I find that diving deep within during meditation, a kind of happiness is experienced that has nothing to do with anything in the outer world. It is just the bliss of Being. When our hearts and minds are only directed outward, we tend to look to the material aspects of life—money, physical comfort and relationships for fulfillment. I think the more people practice meditation and learn to access their deeper Self, the less their sense of happiness will be determined by the changing phases and temporary joys of life.

[Suann]

01:09 AM on 06/09/2010

Be careful about being sold the idea of "How to be Happy". It's all what we make it. 3 years ago, I cried and threw up while driving to work, I hated EVERYTHING about my job, salary, hours, pay etc. I thought "At least my brother made something of his life, beautiful family, successful business, big house. etc"
Then, he hung himself. For months, I woke up crying, What had I missed? How did I miss it?
He had every reason to be fulfilled, I had none, but, I was still here, how could that happen?
Then I figured out MY PART OF THE PROBLEM. I am responsible for MY happiness. If it's broken, I need to fix it.
In a way, I feel guilty that I couldn't find this wisdom before I lost someone so beautiful, but I also WILL not stand by and let a co-worker or friend feel alone or afraid again.
While being consumed by my own dismay, I let someone I loved slip away. ( I never told him about my crying/throwing up). He thought I was happy.
Now at work, I let things go. I force my staff to work it out together. I take time with each customer. I try not to take it home.
W/ reguards to money, I know if I need it, money will come. Tomarrow, I have a BIG challenge, I just might tell my boss to "Ram It" and quit. (My brother would LOVE that!)

[vippy]

05:30 PM on 06/08/2010

Well, happiness does not pay your taxes, nor for food or the very existence of oneself. Some people love to work hard and get ahead but even that has been taken from them. A few at the top
thought of neat programs like NAFTA and got rid of your job, then left the southern border open for anyone to come marching in and take jobs for even lesser money.
One million or more already gave up looking for work, they have exhausted themselves looking for work. And yet people are still smitten with Nancy Pelosi, etc. because of what? She lies and we know that by now. In fact, Obama is talking tough now with BP but on the other hand he already knew that his program won't help the people in Louisiana. To make that even clear you already heard Vitter and the governor of Mississippi already taking sides with the wrong people. The fact that most people in the USA don't even make $ 60,000 is shameful.

[MrT3]

07:02 AM on 06/08/2010

duh...anybody who's been broke knows money doesn't make you "happy" but having it is definitely better than not having it

[Kate Emery]

05:40 AM on 06/08/2010

We've been taught by our materialistic society that having stuff makes you happy, and therefore the more money you have the more stuff you can buy and the happier you will be. The gallop poll showing that above a certain amount buys you no additional happiness gives lie to this dangerous premise.

I suspect that gratitude is what makes both the experiential and remembering self feel happy. Gratitude keeps you in touch with the gift you have right now as well as the memory of an experience.

Fascinating Talk!

[JScott]

07:34 PM on 06/07/2010

There's a similar discussion in a most recent Mother Jone's about do we need to have a constantly growing economy......even some of the major econ thinkers in the past have questioned that premise.....google it you can probably find more.

[squat6971]

10:11 AM on 06/07/2010

If this were true, there wouldn't be so very many unhappy people making $100,000 plus, would there?

[Hokey Pokey]

08:29 AM on 06/07/2010

The dismal science pronouncing on happiness, now I've seen everything.

[Fleurdamour]

02:09 AM on 06/07/2010

Sadly, the only job I've ever had that paid $60K per year was one of the worst jobs I have ever had. LOVED the money, hated the job. I hated it so much I not only quit, I moved away from NYC where I lived at the time because I knew that the only way to make that much money in that town was to take another job just as bad. I do agree that that was a very comfortable amount to be making, and I'd like to earn that again, but only if I am doing something I love. Enough money does help with happiness, but it's only part of the picture.

[GerryS]

12:06 AM on 06/07/2010

I am 56 years old, and I would attempt a standing back-flip, if I got a job that paid $60k/year,

I have owned sucessful businesses, sold them, saved a ton of $$ but------------------

[cache]

08:58 PM on 06/06/2010

I think it was in one of the Dalai Llama's books or interviews, where he stated that in terms of happiness once our basic needs are met, we need only enough to live like the majority of those around us. More than that will not improve happiness. Less will have a negative impact. So a fixed measure such as 60k may apply in our culture, but cannot be generalized. Though I do agree whole heartedly with his premise.

[PlayTOE]

12:52 PM on 06/06/2010

Happiness is 60,000 per year ...
... now we all know what income level to shoot for ...

[Kahill]

10:26 AM on 06/06/2010

A very interesting talk! It’s actually the first time I have heard so clearly articulated the distinction between the “experiencing self” and the “remembering self”, although I have intuitively felt it for a long time. In my personal life, I have had many happy ‘events’ in my past, and while these events were interspersed between fairly long drab periods, I remember them with fondness and I feel happy. I wonder if I am an overly ‘remembering’ person compared to others. Is a future ‘experiencing’ event mainly a set-up for many ‘remembering’ moments. Is there a difference in happiness from ‘experiencing’ or from ‘remembering’, as long as you are happy? I don’t think the $60K number had any hard significance, though. Just some thoughts.

[CrazedSurfer]

07:46 AM on 06/06/2010

The better the waves the happier I become.