Can money really buy happiness? A report puts a number to it

A latest report estimates India's income satiation level at about Rs 20 lakh a year. The finding suggests extra earnings matter less to life evaluation after that point.Higher income improves housing, healthcare and security. Happiness has long withstood the scales of measurement, as its subjective to individuals but a recent report attempts to put a number to that question.It does so not by claiming that happiness can essentially be bought, but by looking at the point at which more money starts making less of a difference to how people feel about their lives. The report describes this as being the income satiation for an individual.But before arriving at this figure, it is important to understand what is being measured as happiness. The report's measure of happiness combines three elements together: how people rate their current lives on a scale of 0 to 10, where 0 represents the worst possible life and 10 representing the best, and lastly, whether they experienced positive or negative emotions for much of the previous day.For India, this estimated point at around $21,577, or roughly Rs 20 lakh a year at the current exchange rate, reported Remitly. But the Rs 20 lakh figure is only one part of the larger income-happiness equation. In order to know what it really means, it is important to first look at how strongly money influences well-being in the first place.UPTO WHAT EXTENT DOES MONEY MATTER?According to the report, an individual's income is generally linked to how the person assesses their well-being. This is precisely where happiness, as per the report, is calculated in terms of life satisfaction, positive feelings, and negative feelings. In day-to-day life, people with higher incomes tend to report greater life satisfaction as money provides access to better housing, healthcare, education and greater financial security.However, even this relationship comes with its own shelf-life. The Purdue University study on which the report is based, found that the relationship between income and life satisfaction basically varies across regions, with the gains from additional income becoming smaller at higher levels.This helps explain as to why the same increase in income can have very different effects on people's lives. To put this in perspective, for someone who is struggling to make ends meet, a generous raise could significantly improve their living conditions.On the other hand, for someone who is already financially secure, the same increase may offer comfort or convenience but fail to produce a comparable change in the personal satisfaction level.The question then, is not whether money matters, but how much its effect changes the perceived happiness mark for people with a rise in incomes.COST OF HAPPINESS IN OTHER COUNTRIESThe cost of happiness takes a spin across the globe, as the report's estimated income to reach happiness is not monotonous. As per its findings, Iceland has the highest income satiation point at $163,579 a year. It is then followed by Australia at a cost of $161,302, while the figures for Switzerland, New Zealand and the US stand at $154,504, $137,361 and $134,827, respectively.Many factors such as local prices, purchasing power, sociocultural and living conditions can influence how far an income goes, which is why the estimated satiation point differs across countries."Where you have gender equality, the social, economic and political aspects tend to be more stable and better for people and the natural surroundings," author Hrund Gunnsteinsdóttir told the BBC. "In countries with greater gender equality, people are healthier, happier and have better wellbeing."The global picture, therefore, suggests that reaching a certain income level may improve financial security, but money alone cannot capture everything that forms the basis of how people experience their well-being.WHY THE THE RS 20 LAKH THRESHOLD?The reported figure of Rs 20 lakh is not a magic “happiness salary”, nor does it mean that earning below this amount makes someone unhappy. It is an estimate of the point at which additional income is likely to have a smaller effect on how people evaluate their lives.This means that the value of an additional rupee depends on where a person is positioned financially in life. In this sense, the report also points to a larger distinction between having more money and getting more out of it.This means that income can expand the choices available to a person, but the extent to which those choices translate into greater life satisfaction may change as financial comfort grows.Therefore, the report's estimate of the “cost of happiness” is best understood as an indication of where the relationship between income and happiness begins to weaken, rather than a fixed salary at which Indians could become happy. Hence, the figure intends to capture how the impact of money on happiness can change as corresponding income rises.- EndsPublished By: Radhika VermaPublished On: Aug 19, 2026 16:59 IST