Diminishing marginal utility of income? Caveat emptor

[T]he income and happiness relationship is...curvilinear... with a decreasing marginal utility for higher levels of income....(Diener, Sandvik, Seidlitz, and Diener, 1993, p. 204; cf. also Diener and Biswas-Diener, 2002, p. 119) [W]e not only see a clear positive relationship [between happiness and GNP per capita], but also a curvilinear pattern; which suggest that wealth is subject to a law of diminishing happiness returns (Veenhoven, 199 1, p. 10; cf. also 1989, pp. 15-18; 1993, p. 127). Comparing across countries, it is true that income and happiness are positively related and that the marginal utility falls with higher income. Higher income clearly raises happiness in developing countries, while the effect is only small, if it exists at all, in rich countries (Frey and Stutzer, 2002a, p. 90). The early phases of economic development [as measured by GNP per capita] seem to produce a big return... in terms of human happiness. But the return levels off...Economic development eventually reaches a point of diminishing returns...in terms of human happiness. (Inglehart, 2000, p. 219; cf. also 1997, p. 61).