Is there any correlation between how much money you have or make, and whether you are happy? Can we use money to buy happiness, and if we can, what is the best way to spend it to get the most happiness possible?
In March in The Journal of Positive Psychology, P. Pchelin and R. Howell @ San Francisco State University (SFSU) found that before folk made a purchase, they valued material purchases over experiential purchases. However, two weeks and four weeks after the purchase, experiential purchases were perceived to be a better use of money than material ones, as shown @ left.
Why do we "over-value" material purchases? Howell said "People think that experiences are only going to provide temporary happiness, but they actually provide both more happiness and more lasting value." Folk buy material things because they're tangible and we think we can keep on using them.
In July in Journal of Consumer Psychology, Guevarra and Howell found that material purchases that produced an experience, i.e. "experiential products", like books, sporting goods, video games or musical instruments, produced the same happiness as experiences that didn't require a material purchase. So, it's the experience that counts, not whether it required a material purchase.
Thomas Gilovich @ Cornell reached similar conclusions. Folk reason that "I have a limited amount of money and I can either go there or I can have this. If I go there, it'll be great, but it'll be done in no time. If I buy this thing, at least I'll always have it."
However, "hedonic adaptation", or the "hedonic treadmill" works against us. We adapt to our material goods and tend to forget about them, and then need to keep buying more and more to "keep up w/the Joneses", or to keep feeling excited about our purchases. As the quote @ Jimmy John's sub shop states "the gap between more and enough never closes."
If we go on a yoga/meditation retreat on Maui, we'll remember it and be able to talk about it w/our friends (and frenemies) for a long time. Gilovich also found that we don't compare our experiences w/other folk as much as we do our material purchases, which turns out to be really important.
If a frenemy buys a faster, sharper laptop or phablet than our new one, it'll bother us a lot more than if a frenemy goes to Bali for a meditation retreat while we went to Maui.
Gilovich and his collaborators also found in an October paper, "Waiting for Merlot" in Psychological Science, that we get more pleasure out of anticipating pleasures than we do anticipating getting material things. Waiting for an event usually excites us, but waiting for material purchases seems to generate mostly impatience.
Elizabeth Dunn @ Univ of British Columbia conducted an experiment with chocolate, many folks' drug of choice. She gave a big bag to three different groups; one was told to eat as much as they possibly could, another group was forbidden to eat it, while a third could choose how much to eat.
Guess who was happiest w/their next bar of chocolate...yes, the ones who were forbidden to eat it, e.g. "forbidden fruit".
Dunn gave cash to students and told some to spend it on themselves and another group to spend it on someone else. Who was happiest? Well, the group who spent money on other folk. She has done this experiment all over the world w/the same result.
Dunn also asked folk if they were as happy giving away their own money as they were giving away money they got from her. The surprising conclusion was that giving away money regardless of the source consistently made folk happier, whether it was Canada, South Africa or Uganda, even when they were relatively poor.
She described this as "probably the biggest surprise of my career...we see the benefits of giving even among people who are struggling to meet their own basic needs."
Amount given was also not that important in terms of happiness; the big factor was the perceived impact of your donation. If you can see your money making a difference in other folks' lives, it will make you happy even if the amount you gave was small.
How you spend money on yourself is also important in your happiness. The most important use Dunn found was to "buy yourself time" so you didn't need to do tasks you dislike. It was also critical to use the time in the right way.
Nobel Laureate Daniel Kahneman and Angus Deaton @ Princeton looked at "affective" happiness, or how often you experience positive emotions like joy or tranquility rather than negative ones in everyday "ups and downs".
They found that affective happiness did not rise after household income was above a certain base level. If you don't have enough to take care of your basic needs, it is hard to be happy. If you have enough to meet your basic needs, it is difficult to "buy" more happiness in your everyday life.
An earlier blogpost "Experiencing self vs remembering self...who is happier? "now, now" or "blah, blah"? highlighted Kahneman's work at contrasting what we experience with what we remember about the experience. As far as what we remember, the key element was how we felt about the last thing we experienced in an event, rather than what we actually experienced.
This was demonstrated by the pain versus time chart (at right) for a surgical procedure. Which was more pleasurable, the blue procedure or the red one?
Well, during the procedure, clearly the blue procedure was less painful. However what you remember as being the most painful will also be the blue one, because it was more painful when it ended.
This is the difference between what you experience and what you store in memory.
Finally, no surprise, debt has a negative effect on happiness, while savings tend to boost it. Households in Britain w/higher levels of debt had lower happiness and married couples had more marital conflict.
Dunn found that "Savings are good for happiness; debt is bad for happiness. But debt is more potently bad than savings are good. From a happiness perspective, it's more important to get rid of debt than to build savings."
This fits w/the broadly-demonstrated "negativity bias" for thoughts, emotions, events, etc., in which equal-intensity negative things are much more heavily weighted than positive ones. There are some good reasons why this developed evolutionarily.
So, experiences are a better "buy" than "stuff" and giving to others is better than using it yourself even if you don't have very much, particularly if you can see it's helping them. Also, beyond having enough to be safe, sheltered and adequately fed, more is never enough...that's why we do self-inquiry.
BTW, re the recent SAND meeting, the well-known marketing consultant, Renee Blodgett, blogged a summary of her experiences @ SAND, including my preso.
BTW 2, Rich Doyle and i will do another monthly "first Sunday" SynchCast live, open dialogue on Dec 7 @ 3:00 pm EST/12:00 pm PST/8:00 pm GMT. Donations for costs.
BTW 3, at right is a pic from the "Awakening: Experience and Science" gathering in Philadelphia last weekend.
BTW 4, i will be giving the Dharma Talks @ O-An Zendo this Sunday @ 11:15 and on December 14.
BTW 5, the Mindful Cyborgs podcast/interview "Empirical Emporium Beyond Selfie Blah-Blah PT 1" is on line now. PT 2 will be up next week.
In March in The Journal of Positive Psychology, P. Pchelin and R. Howell @ San Francisco State University (SFSU) found that before folk made a purchase, they valued material purchases over experiential purchases. However, two weeks and four weeks after the purchase, experiential purchases were perceived to be a better use of money than material ones, as shown @ left.  |
| Ryan Howell SFSU |
Why do we "over-value" material purchases? Howell said "People think that experiences are only going to provide temporary happiness, but they actually provide both more happiness and more lasting value." Folk buy material things because they're tangible and we think we can keep on using them.
In July in Journal of Consumer Psychology, Guevarra and Howell found that material purchases that produced an experience, i.e. "experiential products", like books, sporting goods, video games or musical instruments, produced the same happiness as experiences that didn't require a material purchase. So, it's the experience that counts, not whether it required a material purchase.
 |
| Hedonic Treadmill |
Thomas Gilovich @ Cornell reached similar conclusions. Folk reason that "I have a limited amount of money and I can either go there or I can have this. If I go there, it'll be great, but it'll be done in no time. If I buy this thing, at least I'll always have it."
However, "hedonic adaptation", or the "hedonic treadmill" works against us. We adapt to our material goods and tend to forget about them, and then need to keep buying more and more to "keep up w/the Joneses", or to keep feeling excited about our purchases. As the quote @ Jimmy John's sub shop states "the gap between more and enough never closes."
 |
| Thomas Gilovich Cornell |
If we go on a yoga/meditation retreat on Maui, we'll remember it and be able to talk about it w/our friends (and frenemies) for a long time. Gilovich also found that we don't compare our experiences w/other folk as much as we do our material purchases, which turns out to be really important.
If a frenemy buys a faster, sharper laptop or phablet than our new one, it'll bother us a lot more than if a frenemy goes to Bali for a meditation retreat while we went to Maui.
Gilovich and his collaborators also found in an October paper, "Waiting for Merlot" in Psychological Science, that we get more pleasure out of anticipating pleasures than we do anticipating getting material things. Waiting for an event usually excites us, but waiting for material purchases seems to generate mostly impatience.
Elizabeth Dunn @ Univ of British Columbia conducted an experiment with chocolate, many folks' drug of choice. She gave a big bag to three different groups; one was told to eat as much as they possibly could, another group was forbidden to eat it, while a third could choose how much to eat. Guess who was happiest w/their next bar of chocolate...yes, the ones who were forbidden to eat it, e.g. "forbidden fruit".
Dunn gave cash to students and told some to spend it on themselves and another group to spend it on someone else. Who was happiest? Well, the group who spent money on other folk. She has done this experiment all over the world w/the same result.
 |
| Elizabeth Dunn Univ of British Columbia |
She described this as "probably the biggest surprise of my career...we see the benefits of giving even among people who are struggling to meet their own basic needs."
Amount given was also not that important in terms of happiness; the big factor was the perceived impact of your donation. If you can see your money making a difference in other folks' lives, it will make you happy even if the amount you gave was small.
How you spend money on yourself is also important in your happiness. The most important use Dunn found was to "buy yourself time" so you didn't need to do tasks you dislike. It was also critical to use the time in the right way.
 |
| Daniel Kahneman Princeton |
They found that affective happiness did not rise after household income was above a certain base level. If you don't have enough to take care of your basic needs, it is hard to be happy. If you have enough to meet your basic needs, it is difficult to "buy" more happiness in your everyday life.
An earlier blogpost "Experiencing self vs remembering self...who is happier? "now, now" or "blah, blah"? highlighted Kahneman's work at contrasting what we experience with what we remember about the experience. As far as what we remember, the key element was how we felt about the last thing we experienced in an event, rather than what we actually experienced.
This was demonstrated by the pain versus time chart (at right) for a surgical procedure. Which was more pleasurable, the blue procedure or the red one? Well, during the procedure, clearly the blue procedure was less painful. However what you remember as being the most painful will also be the blue one, because it was more painful when it ended.
This is the difference between what you experience and what you store in memory.
Finally, no surprise, debt has a negative effect on happiness, while savings tend to boost it. Households in Britain w/higher levels of debt had lower happiness and married couples had more marital conflict.
Dunn found that "Savings are good for happiness; debt is bad for happiness. But debt is more potently bad than savings are good. From a happiness perspective, it's more important to get rid of debt than to build savings."
This fits w/the broadly-demonstrated "negativity bias" for thoughts, emotions, events, etc., in which equal-intensity negative things are much more heavily weighted than positive ones. There are some good reasons why this developed evolutionarily.
So, experiences are a better "buy" than "stuff" and giving to others is better than using it yourself even if you don't have very much, particularly if you can see it's helping them. Also, beyond having enough to be safe, sheltered and adequately fed, more is never enough...that's why we do self-inquiry.
BTW, re the recent SAND meeting, the well-known marketing consultant, Renee Blodgett, blogged a summary of her experiences @ SAND, including my preso.
BTW 2, Rich Doyle and i will do another monthly "first Sunday" SynchCast live, open dialogue on Dec 7 @ 3:00 pm EST/12:00 pm PST/8:00 pm GMT. Donations for costs. BTW 3, at right is a pic from the "Awakening: Experience and Science" gathering in Philadelphia last weekend.
BTW 4, i will be giving the Dharma Talks @ O-An Zendo this Sunday @ 11:15 and on December 14.
 |
| Mindful Cyborg |
BTW 5, the Mindful Cyborgs podcast/interview "Empirical Emporium Beyond Selfie Blah-Blah PT 1" is on line now. PT 2 will be up next week.
Excellent summary, Gary. There is a real coherence to this research. Wonder if/how it will make its way into the world. Like Gilbert's "Stumbling On Happiness", the implications are revolutionary, and another path to OS2.
ReplyDeleteHi Glenn. There is some indication that countries are concerned about "happiness", "well-being" or "prosperity". The Bhutan government has been famous for its work in this area with its "Gross National Happiness" index @ http://en.wikipedia.org/wiki/Gross_national_happiness. There is a lot of controversy over Bhutan's governing policies and this index as covered in the article.
ReplyDeleteThere is also the Legatum Institutes' "Prosperity Index" for about 142 countries @ http://en.wikipedia.org/wiki/Legatum_Prosperity_Index, which gets broad coverage, even in magazines like Forbes. The 2014 rankings are @ http://www.prosperity.com/#!/ranking. There are other elements beyond "happiness" (personal well-being), including wealth, health care, economic growth, and education included.
At least there is a growing regard for the "personal well-being" of folk. 27 of the top 30 countries in the Legatum Index are democracies. Democracies seem to realize they need happy voters.
It is evolving.
Trust this is useful.
stillness
Thank you Gary...wonderful n amazing researched facts...! Thanks for sharing!
ReplyDeleteLove
Hi Nitin,
DeleteGreat that you found it useful. An amazing coalescence of several good studies on a critical subject. That alone speaks volumes on a shifting focus to well-being/happiness.
stillness
One more plus is that experiences do not require future maintenance and storage. That for me is huge.
ReplyDeleteYes, an excellent point.
DeleteOur memory of experiences does change and our ability to recall them correctly a few years later, particularly the important ones that we have recalled frequently, is basically "zero".
There's even an evolutionarily-evolved, adaptive reason why that happens. The blogposts "Traumatic memories feel true but they are always changing" and "How neuroscience, psychological studies, and our poor memories change the law", discuss the research on this.
stillness
Hello Dr. Weber,
ReplyDeleteWhat are your thoughts on sleeping more than needed to improve mental and physical well-being? I have found from personal experience that when I sleep 10 hours a night, I feel much more calm and content. I know that sleeping more may require sacrifices in daily responsibilities and most likely income potential. But isn't being calm and content the main point of every thing we do?
Hi Anonymous,
ReplyDeletei am the wrong folk to ask about that as i was never able to have the time to sleep 10 hrs/night. i had a wife, two kids, a 50+ hr/week job that required lots of travel, and needed to get in 2 hrs of meditation/yoga every day, no matter what, which meant getting up @ 4 or 4:30 am every day.
The main point for me was being free of suffering, which is why i did what i did, and it worked. i haven't worked w/ or met anyone who had adopted your approach who was free of their suffering and attachments. That doesn't mean there aren't any, but i haven't met them.
stillness