The paper looked at the level of negative emotion reported by participants in the Panel Study of Income Dynamics — a long-running longitudinal survey of thousands of Americans.
People were asked how often they experienced negative feelings like nervousness, hopelessness or restlessness in the last 30 days (K9 scores).
If you have clothes to wear, food to eat, and a roof over your head, increased disposable income has just a small influence on your sense of well-being.
To put it another way, if you’re living below the poverty line ($22,050 annual income for a family of four in 2009), an extra $5,000 a year can make a buy some happiness, but as you’ll see, it’s just one piece of the puzzle.
And there’s a real danger that increased income can actually make you miserable—if your desire to spend grows with it.
But that’s not to say you have to live like a monk.
That study analyzed data from the Gallup Organization in the Gallup-Healthways Well-Being Index (GHWBI).
It's a lower number because researchers in that case used a single person's income rather than the family income used by Clingingsmith.
"We know from the results that changes in family income are important drivers of people's emotional lives," said David Clingingsmith, the author of the paper and an associate professor of economics at the Weatherhead School of Management.
While it may also be true that having high anxiety or sadness could lead to lower income, the study shows that that's not the whole story, said Clingingsmith.