Income and emotional well-being: Evidence for well-being plateauing around $200,000 per year

Mikkel Bennedsen

Economics Letters, 2024, vol. 238, issue C

Abstract: Is emotional well-being monotonically increasing in the level of income or does it reach a plateau at some income threshold, whereafter additional income does not contribute to further well-being? Using a data-driven approach to detect the placement of the threshold, we find a flat relationship between household income and emotional well-being above a threshold around $200,000 per year. Our analysis relies on a number of assumptions, which we briefly discuss. We conclude that although the analysis of this paper provides some evidence for well-being plateauing around $200,000 per year, more research is needed before any definite conclusions about the relationship between emotional well-being and income can be drawn.

Keywords: Well-being; Income; Structural break; Quantile regression (search for similar items in EconPapers)
JEL-codes: C13 C21 I31 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:238:y:2024:i:c:s0165176524002131

DOI: 10.1016/j.econlet.2024.111730

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