Adam Smith predicts that income/pop of $20k will bring greater happiness than income/pop of $25k if the former is growing and the latter is stagnant – see a screenshot of his massively influential 1776 work Wealth of Nations below.

Smith’s hypothesis has not (to my knowledge) been empirically tested but it is very much in line with an influential theory published over 200 years later in Econometrica – Kahneman and Tversky’s Prospect Theory. It is also very much in line with empirical data published by Stirling Behavioural Science Centre member Christopher Boyce – Money, Well-Being, and Loss Aversion (sagepub.com).

University of Glasgow – Explore – Adam Smith 300 Year Anniversary