(Consider This) Kara was earning $40,000 per year. When her income rose to $60,000 per year, she enjoyed the higher level of consumption for a while, but eventually she was no more happy than when she earned $40,000 (assume prices didn't change over this time period). Economist Richard Easterlin described this as

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The situation described is an example of the hedonic treadmill, which is the tendency for people to quickly adapt to changes in their level of consumption and return to their previous level of happiness. In this case, Kara initially enjoyed the higher level of consumption that came with her increased income but eventually returned to her previous level of happiness despite the increased income.

(Consider This) Kara Was Earning $40,000 Per Year