Happiness: A buyers guide

Money can improve your life, but not in the ways you
think
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By Drake Bennett
August 23, 2009
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Te+t si)e , -
.an !oney /uy happiness0 *ince the invention o1 !oney, or nearly enough, people have
/een telling one another that it can2t3 &hilosophers an gurus, holy /ooks an sel1#help
!anuals have all 4arne o1 the 1utility o1 e5uating !aterial gain 4ith true 4ell#/eing3
Discuss
.677$8T* (39)
7oern research generally /acks the! up3 &sychologists an econo!ists have 1oun that
4hile !oney oes !atter to your sense o1 happiness, it oesn2t !atter that !uch3 Beyon
the point at 4hich people have enough to co!1orta/ly 1ee, clothe, an house the!selves,
having !ore !oney # even a lot !ore !oney # !akes the! only a little /it happier3 *o
there2s 5uantitative proo1 1or the preachings o1 *t3 :rancis an the 4iso! o1 the Buha3
Ba ne4s 1or har#charging /ankers; goo ne4s 1or struggling !usicians3
But starting to e!erge no4 is a i11erent ans4er to that age#ol 5uestion3 A 1e4
researchers are looking again at 4hether happiness can /e /ought, an they are
iscovering that 5uite possi/ly it can # it2s <ust that so!e strategies are a lot /etter than
others3 Taking a 1rien to lunch, it turns out, !akes us happier than /uying a ne4 out1it3
*plurging on a vacation !akes us happy in a 4ay that splurging on a car !ay not3
=>ust /ecause !oney oesn2t /uy happiness oesn2t !ean !oney cannot /uy happiness,?
says $li)a/eth Dunn, a social psychologist an assistant pro1essor at the @niversity o1
British .olu!/ia3 =&eople <ust !ight /e using it 4rong3?
Dunn an others are /eginning to o11er an intriguing e+planation 1or the poor 4ealth#to#
happiness e+change rate: The pro/le! isn2t !oney, it2s us3 :or eep#seate psychological
reasons, 4hen it co!es to spening !oney, 4e ten to value goos over e+periences,
ourselves over others, things over people3 Ahen it co!es to happiness, none o1 these
ecisions are right: The spening that !ake us happy, it turns out, is o1ten spening
4here the !oney vanishes an leaves so!ething ine11a/le in its place3
Any atte!pt to put these 1inings into practice, ho4ever, has to conten 4ith the su/tle
/ut po4er1ul 4ays !oney itsel1 channels our thinking, an the 4ays it plays on hu!an
attitues a/out sharing an scarcity3 'ecent stuies have suggeste that !erely thinking
a/out !oney !akes us !ore solitary an sel1ish, an steers us a4ay 1ro! the spening
that pro!ises to !ake us happiest3
:iguring out ho4 to clear this hurle has i!plications 1or our aily /uget ecisions an
our invest!ents, an 1or ho4 organi)ations 1ro! resorts to charities o /usiness3 7oney
is insepara/le 1ro! our e+istence in society # 4e 4ork 1or !oney, live on !oney, an
hoar it an spen it 1or a tangle !i+ o1 reasons3 As psychologists unpack these insights,
their 4ork o11ers a po4er1ul ne4 4ay to think a/out this co!ple+ an poorly unerstoo
relationship3 An it gives us a chance to use our spening !oney, ho4ever !uch it !ay
/e, as a vehicle to a !ore 1ul1illing li1e rather than <ust a /etter accessori)e one3
Despite !illennia o1 1olk 4iso! on the topic, it 4asn2t until a ecae ago that
researchers starte to take a har look at 4hether !oney really oes have anything to o
4ith happiness3 In the late B990s, a psychologist na!e 7artin *elig!an 1oune the
1iel o1 positive psychology, riven /y the iea that psychologists ha as !uch o1 a uty
to 1igure out 4hat !ae people happy as to stuy their pro/le!s3 At the sa!e ti!e, a 1e4
econo!ists 4ere starting to /orro4 the tools o1 psychology to challenge so!e o1 the
assu!ptions that their 1iel ha long hel a/out hu!an /ehavior # that people 4ere
rational calculators o1 cost an /ene1it, 1or e+a!ple, an that looking at ho4 people spent
!oney coul /e a relia/le inicator o1 their eeper esires3
&ositive psychologists an so#calle /ehavioral econo!ists /oth turne their attention to
the !oney#happiness ne+us3 7apping 1inancial statistics against people2s sel1#reporte
happiness, the researchers si1te ata 1ro! rich nations an poor nations, 1ro! people up
an o4n the econo!ic laer, an 1ro! iniviuals as their econo!ic 1ortunes i!prove
or eteriorate3 The connection /et4een 4ealth an happiness, they 1oun, 4as pretty
4eak3
=It2s not a )ero correlation, even at higher inco!e levels, /ut it2s not a very /ig
correlation,? says *on<a Cyu/o!irsky, a psychology pro1essor at the @niversity o1
.ali1ornia at 'iversie an a leaing happiness researcher3 7oney, she says, =!atters less
than 4e think it 4oul3?
But 4hat i1 that 4asn2t the 4hole story0 Dunn, o1 the @niversity o1 British .olu!/ia,
re!e!/ers 4onering a couple years ago 4hether !oney an happiness 4ere necessarily
so isconnecte3 &artly, she 4as inspire /y a change in her o4n circu!stances: *he ha
<ust gotten hire as an assistant pro1essor, her salary suenly <u!ping 1ro! a post#
octoral researcher2s D20,000 stipen to a/out 1our ti!es that !uch3 *he 1oun it har to
/elieve that there 4as nothing she coul o 4ith so!e o1 that ne4 !oney to !ake hersel1
happier3
Ahat i1, 1or e+a!ple, she spent it not on a ne4 1lat#screen television or sectional so1a, /ut
on other people0 6ne o1 the !ost consistent 1inings o1 the happiness literature is that
having a strong social net4ork is an e+cellent preictor o1 happiness, an it see!e
plausi/le that you coul use !oney to /uy happiness that 4ay3 *he tea!e up 4ith
7ichael 8orton, a psychologist an assistant pro1essor at Earvar Business *chool, an
the t4o e!/arke on a series o1 e+peri!ents to test 4hether spening !oney on others
actually !akes us happier than spening it on ourselves3
:irst, they surveye 932 A!ericans on their general happiness, along 4ith 4hat they
spent their !oney on, an 1oun that higher =prosocial spening? # gi1ts 1or others an
onations to charity # 4as inee correlate 4ith higher sel1#reporte happiness3 They
1ollo4e this up 4ith a !ore etaile look at B9 4orkers /e1ore an a1ter they receive a
pro1it#sharing /onus 1ro! their co!pany3 They 1oun that the only 1actor that relia/ly
preicte 4hich 4orkers 4oul /e happy si+ to eight 4eeks a1ter the /onus 4as their
prosocial spening # the !ore !oney people spent on charity an gi1ts 1or others, the
happier they 4ere3
But 4as the happiness cause /y giving !oney a4ay, or 4ere charita/le people si!ply
happier to start 4ith0 To sho4 a causative link, they then per1or!e an e+peri!ent in
4hich volunteer test su/<ects 4ere given a s!all 4in1all o1 DF to D203 *o!e o1 the
su/<ects, chosen at rano!, 4ere tol to spen it on a /ill, an e+pense, or a gi1t 1or
the!selves3 The others 4ere tol to /uy a gi1t 1or so!eone else or !ake a charita/le
onation3 A1ter4ars, the secon group # the ones 4ho ha given the !oney a4ay #
reporte /eing signi1icantly happier than those 4ho ha spent the !oney on their o4n
nees3
Dunn an 8orton pu/lishe their results in the <ournal *cience in 7arch 200G3 The lesson
o1 their stuy, says Dunn, is clear3 7oney !akes you !ost happy i1 you on2t spen it on
yoursel13
=By that I o not !ean give all your !oney a4ay an live in a shack,? she says3 =I <ust
!ean think a/out increasing it slightly3 >ust reallocating as little as DF on a given ay can
!ake a i11erence in happiness3?
Another the!e that has e!erge in si!ilar research is that !oney spent on e+periences #
vacations or theater tickets or !eals out # !akes you happier than !oney spent on
!aterial goos3 Cea1 Han Boven, an associate psychology pro1essor at the @niversity o1
.olorao, an Tho!as Iilovich, chair o1 the psychology epart!ent at .ornell
@niversity, have run surveys asking people a/out past purchases an ho4 happy they
!ae the!3
=Ae generally 1oun very consistent evience that e+periences !ae people happier than
!aterial possessions they ha investe in,? says Han Boven3
Ahy0 :or one thing, Han Boven an Iilovich argue, e+periences are inherently !ore
social # 4hen 4e vacation or eat out or go to the !ovies it2s usually 4ith other people,
an 4e2re lia/le also to relive the e+perience 4hen 4e see those people again3 An past
e+periences can 4ork as a sort o1 social ahesive even 4ith people 4ho in2t participate
4ith us, proviing stories an conversational 1oer in a 4ay that a ne4 4atch or
spee/oat rarely can3
In aition, other 4ork /y Han Boven suggests that e+periences on2t usually trigger the
sa!e sort o1 pernicious co!parisons that !aterial possessions o3 Ae like our car less
4henever 4e catch a gli!pse o1 our neigh/or2s ne4er, nicer car, /ut 4e on2t like our
honey!oon any less /ecause our neigh/or 4ent on a 1ancier one3
An 4hile 4e 5uickly gro4 accusto!e to a ne4 suit or a /igger house, no !atter ho4
!uch 4e originally love it, e+periences instea ten to get /urnishe in our !e!ory # a
year a1ter a vacation, 4e look /ack not on the stress o1 ealing 4ith lost luggage or the
1ights over 4hich 4ay the hotel 4as, /ut the /eauty o1 the scenery or the e+otic 1lavors o1
the 1oo3
Ahy, then, on2t 4e alreay spen !ore o1 our !oney this 4ay0 61 course, people o
give to charity an go on vacations an treat their 1riens to the occasional inner3 But i1
the goal is to /uy happiness, 4e still spen !ore on stu11 an on ourselves than 4e
shoul3
&art o1 the pro/le! is that happiness isn2t necessarily 4hat2s !otivating us 4hen 4e
reach 1or our 4allets3 7uch o1 the i!petus 1or iscretionary spening # even 1or see!ing
essentials like cars, houses, an clothes # co!es 1ro! a esire to sen certain signals
a/out our /uying po4er an our tastes3 Ae !ight !istake that !otivation 1or happiness,
or 1or having a /etter li1e, /ut it2s riven /y so!ething else, a hu!an nee to co!pete or
to 1it in3 An DF,000 4orth o1 ne4 stu11, or even DF00,000 4orth, is unlikely to
per!anently 5uell that nee3
$ven i1 4e learn to recogni)e that i!pulse 1or 4hat it is, ho4ever, !oney has a
psychological po4er o1 its o4n3 It see!s that si!ply thinking a/out !oney !akes us less
likely to o prosocial things3 Jathleen Hohs, a psychologist an associate pro1essor at the
@niversity o1 7innesota .arlson *chool o1 7anage!ent, has one stuies in 4hich
people 4ere pri!e to think o1 !oney # /y either reaing te+t that su/tly evoke it or /y
/eing surreptitiously sho4n i!ages o1 ollar /ills # 4hile oing various tasks3 Eaving
!oney on one2s !in, Hohs 1oun, !ae people harer#4orking, even !ore resistant to
pain, /ut it also !ae the! !ore solitary3 They 4ere less likely to o11er help to others or
to onate !oney3 They even chose to put !ore physical istance /et4een the!selves an
other people 4hen talking to the!3
&arao+ically, then, !oney itsel1 /lins us to the 4ays 4e !ight spen it to !ake
ourselves happiest3
=&eople !ay kno4 that /eing nice to other people !akes the! happy, /ut !oney, in an
o1 itsel1, turns us aroun an !akes us think a/out /uying !ore stu11,? says 8orton o1
Earvar Business *chool3
The research, ho4ever, oes suggest a 1e4 4ays to spring ourselves 1ro! this /in3 6ne
intriguing possi/ility is that 4orkplaces coul change to encourage !ore prosocial
spening in their 4orkers3 Dunn an 8orton have argue, 1or e+a!ple, that co!panies
can i!prove their e!ployees2 e!otional 4ell#/eing /y shi1ting so!e o1 their /uget 1or
charita/le giving so that iniviual e!ployees are given su!s to onate, leaving the!
happier even as the charities o1 their choice /ene1it3
An on a !ore personal, everyay level, 4hen 4e2re ra4n to a ne4 pair o1 esigner
sunglasses, 4e coul try to 1actor in the psychological return that 4e !ight get 1ro! a
si!ilar su! spent on a night out 4ith 1riens3
Thinkers are trying to 1igure out ho4 to incorporate these sorts o1 1inings into a ne4
!oel o1 consu!ption3 8orton, along 4ith Dan Ariely, a /ehavioral econo!ist an
pro1essor at Duke @niversity2s :u5ua *chool o1 Business, has coine the ter!
=conceptual consu!ption? to escri/e our 4illingness to spen real !oney on a/stract
goos3 A!ong other things, they argue, it helps e+plain the sort o1 long#ter! payo11 4e
get 1ro! a !e!ora/le inner 4ith a love one3 It2s a testa!ent to the po4er o1 such
conceptual goos, they argue, that in certain settings 4e privilege the concept over actual
physical consu!ption # such as 4hen 4e ecie not to go /ack to the restaurant 4here 4e
ha the special inner /ecause 4e2re a1rai it 4oul ilute the !e!ory3 The !ore 4e
learn a/out consu!er /ehavior, Ariely an 8orton argue, the !ore 4e 4ill reali)e that
nearly every ecision 4e !ake as consu!ers is pri!arily conceptual3
Ahether or not that turns out to /e true, an i!portant change is a1oot in 4ork like Dunn
an 8orton2s an Han Boven an Iilovich2s3 Talking a/out !oney an happiness in the
sa!e /reath, it turns out, isn2t necessarily a surrener to crass !aterialis! # it can also /e
a route to a ne4 an !ore hu!ane 4ay to think a/out vitally i!portant things like
consu!ption, satis1action, invest!ent, an value3
It can also turn the 1a!iliar logic o1 !oney, pruence, an charity al!ost on its hea3
*een this 4ay, /lo4ing !oney on a /ar cra4l 4ith 1riens isn2t necessarily a 4aste o1
your har#earne paycheck # it2s so!ething o1 an invest!ent3 An a generous
philanthropic onation is also an act o1 heonis! even !ore grati1ying than a ne4 Ce+us
or a han!ae 4atch3 7aking !oney vanish can have a payo11 every /it as real, an
possi/ly !ore /ene1icial, than putting it so!e4here to !ake it gro43 "ou <ust have to o
it the right 4ay3
=It2s 1unny, everyone keeps saying !oney oesn2t !ake you happy, /ut !oney can
change the 4orl,? says Cyu/o!irsky3 =It can support political caniates, it can rive
change3 An it can2t /uy !e love, /ut it can certainly get you to !eet people an have
ates3?