Spending Money on Others Promotes Happiness
Abstraction (via Dunn, Aknin, Norton)
Although much research has examined the effect of income on happiness, we suggest that how people spend their money may be at least as important as how much money they earn. Specifically, we hypothesized that spending money on other people may have a more positive impact on happiness than spending money on oneself. Providing converging evidence for this hypothesis, we found that spending more of one’s income on others predicted greater happiness both cross-sectionally (in a nationally representative survey study) and longitudinally (in a field study of windfall spending). Finally, participants who were randomly assigned to spend money on others experienced greater happiness than those assigned to spend money on themselves.
Introduction (Via Dunn, Aknin, Norton)
Can money buy happiness? A large body of cross-sectional survey research has demonstrated that income has a reliable, but surprisingly weak, effect on happiness within nations (1–3), particularly once basic needs are met (4). Indeed, although real incomes have surged dramatically in recent decades, happiness levels have remained largely flat within developed countries across time (5). One of the most intriguing explanations for this counterintuitive finding is that people often pour their increased wealth into pursuits that provide little in the way of lasting happiness, such as purchasing costly consumer goods (6). An emerging challenge, then, is to identify whether and how disposable income might be used to increase happiness.
Ironically, the potential for money to increase happiness may be subverted by the kinds of choices that thinking about money promotes; the mere thought of having moneymakes people less likely to help acquaintances, to donate to charity, or to choose to spend time with others (7), precisely the kinds of behaviors that are strongly associated with happiness (8–12). At the same time, although thinking about money may drive people away from prosocial behavior,money can also provide a powerful vehicle for accomplishing such prosocial goals. We suggest that using money in this fashion—investing income in others rather than oneself—may have measurable benefits for one’s own happiness. As an initial test of the relation
Finding (via Dunn, Aknin, Norton)
Given that people appear to overlook the benefits of prosocial spending, policy interventions that promote prosocial spending— encouraging people to invest income in others rather than in themselves—may be worthwhile in the service of translating increased national wealth into increased national happiness.