Final answer:
Research shows that while increased income can positively affect life satisfaction, the impact varies based on individual and national differences, and other factors such as community connection and workload also play crucial roles. Higher incomes are related to better life evaluations but not necessarily to greater emotional well-being. Beyond a certain income level, additional wealth does not always equate to further happiness increases.
Step-by-step explanation:
Research concerning the link between income and life satisfaction indicates that the relationship is complex. Initial studies suggested a positive correlation between the two, with higher income leading to greater subjective well-being. This is reflected in research by Diener et al. (2002) and Diener, Tay, and Oishi (2013), which highlights that although increased income does boost life satisfaction to some extent, the impact differs across nations and individuals due to varying aspirations and adaptation levels.
Further investigation by Kahneman and Deaton (2010) presents a nuanced view, showing that higher income improves life evaluation, the cognitive aspect of well-being, but not necessarily emotional well-being. The OECD Better Life Index also suggests that while income is an important factor, other aspects like community connection and workload play a significant role in overall life satisfaction. Johnson and Krueger (2006) explored genetic and environmental influences and found that both contribute to how money can translate to happiness.
It is also noteworthy that, according to Kahneman (2011), once a certain level of income is reached, additional money does not necessarily lead to increased happiness. This aligns with the observation that richer people's happiness does not change much even with significant income growth. Pinquart and Sörensen (2000) emphasize the influence of factors such as socioeconomic status and social network on subjective well-being in later life, highlighting that material wealth is not the sole determinant of happiness.