You can buy happiness, but it takes money

Remember the post about measuring societies for success and prosperity by their Gross Happiness Index instead of using a measure of productivity such as the Gross Domestic Product?  Maybe the GDP has something to with the GHI after all.  The Wall Street Journal did a little math to figure how happy we really might be in Lake Oswego.  By their figuring, over half of Lake Oswego households could use a little cheering up.  

U.S. Census data for Lake Oswego for 2012 shows median household income as $84,186.  

What Salary Buys Happiness in Your City?

Wall Street Journal, September 7, 2010, By Phil Izzo

A new study has gained a lot of attention that shows after a worker earns $75,000 the measurable effect on happiness of pay increases stops, but that figure may vary widely from city to city.

As our colleague Robert Frank notes on the Wealth Report, $75,000 in New York doesn’t buy as much as the same amount in, say, South Dakota. That got us thinking, if $75,000 is the national average salary level for happiness, what is the variation from city to city?

The list below is an attempt to answer the question, using some back-of-the-envelope math. Based on cost-of-living index values from Kiplinger.com, we calculated what $75,000 would translate into in some of the nation’s largest cities. One note: the number on the Kiplinger chart for New York City was an extreme outlier, so we used a value froma separate Kiplinger report.

No matter which New York figure is used, the city clocks in with the highest level to achieve satisfaction — over $163,000 by our calculation or $300,000 using the more extreme figure. It took the least amount of money to achieve happiness in Fort Smith, Ark., and Pueblo, Colo., at just over $62,000. While New Yorkers might need more to pay their bills, you might argue that they get paid more on average than the rest of the nation. It’s true that New Yorkers on average earn more than most of the U.S., but workers in the city don’t necessarily command the highest salaries in the country.

Happiness Level, by Metro Area

Portland-Vancouver-Beaverton	OR-WA	117	$87,750

Seattle-Tacoma-Bellevue	WA	114	$85,500

San Francisco-Oakland-Fremont	CA	137	$102,750