What’s The Price of Happiness? It Depends On Where You Live

by Vivienne Woodward

May 10, 2017

Seven years ago, scientists found an answer to the question plaguing mankind for generations: What’s the true cost of happiness? In their Nobel Prize-winning study, economist Angus Deaton and psychologist Daniel Kahneman determined the exact salary at which one’s happiness peaked: $75,000 per year.

But that seemed awfully low to me when I was paying $1,350 per month to live in a three-bedroom apartment in New York City. My room had one window that looked out onto a brick wall and a common space about the size of a cubicle. A friend of mine moved to Memphis and paid $500 for a room in a three-story house (presumably with more windows). I complained about the high cost of living in New York—the accidental $50 bar tabs, the $115 per month subway—but I justified the costs with other sources of happiness: endless people to meet, something new to do every night. My friend and I had the same amount of happiness in our lives, but perhaps my happiness just cost more?

In 2015, researchers at the public polling firm Gallup decided to examine that very question: If a salary of $75,000 translates to a different life in different places, does the cost of living affect that threshold? Turns out, it does. While happiness still peaks, the amount of money it peaks at differs according to where you are, partly based on the cost of living in that particular place.

Peak happiness can cost as low as $42,000 and as high as $120,000.

In the two-year long study, the firm, in partnership with Sharecare, talked to more than 350,000 people from around the United States, asking questions like: “Did you smile or laugh a lot yesterday?” and “Did you experience enjoyment during a lot of the day yesterday?” What they found after analyzing people’s daily emotions adds a slightly more nuanced layer to that $75,000 golden ticket to happiness. According to their research, peak happiness can cost as little as $42,000 and as much as $120,000. Some metropolitan regions were predictably more expensive; in New York, Philadelphia, Los Angeles, and Seattle peak happiness costs $105,000 per year. The metro area of Atlanta achieved peak happiness for the low, low price of $42,000 per year. In Miami, Dallas, Phoenix, Chicago, and Washington, D.C., happiness cost $54,000. Boston and Houston landed at $75,000.

An Atlantan making $42,000 is the same level of day-to-day happy as the New Yorker making $105,000. It just costs less.

Lead researcher Dan Witters is quick to point out that you can't “cap out at higher happiness” in some regions more than others. In other words, an Atlantan making $42,000 is the same level of day-to-day happy as the New Yorker making $105,000. It just costs less.

Interestingly, the confounding region was the Great Lakes—Illinois, Indiana, Michigan, Ohio, and Wisconsin. Their happiness threshold was the highest of any at $120,000, despite the cost of living being highest in eastern cities (New York, Washington, D.C.) and in California (San Francisco, San Jose). Witters wasn’t shocked by the perplexing numbers: “We've learned a lot about the economy and working class residents of these areas, and what's happened with their well-being over [the] last several years. I think it's a fair hypothesis that this is a reflection of people feeling disenchanted, disgruntled, left behind."

Many folks in these states feel abandoned and unheard in the wake of globalization. Industrial jobs that used to employ millions in the Great Lakes region have been taken overseas where there’s cheaper labor. As opportunities and stable income move out of the region, it stands to reason why people would feel their happiness relies on even larger sums.

Trying to convince disgruntled Midwesterners to move because happiness costs less elsewhere doesn’t sound like an easy task, but Witters thinks this philosophy should factor into where people do decide to settle.

It ought to be a consideration that's on the menu,” he told Time. “With some regions, like West North Central and South Central—right in the middle of America—it takes a lot less money to maximize the chance that you'll have a really good day.”

It’s hard to turn down a bunch of really good days. I, for one, did not move to Memphis, even though I knew it was so much cheaper. I’m not sure I would have believed Witters if he told me the lower cost of living would make me happier there. For me—and probably for many of us—I was choosing where I thought I would be happiest; cost was secondary. But perhaps relying on that hunch was a mistake.

Recently on GOOD Money