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Can money buy happiness?

Tuesday, December 23rd, 2008

Researchers find that it can – if you spend it on other people.

In the last few decades real incomes and real wealth have increased much more than people think, but people are no happier, according to research. Gregg Easterbrook wrote a book about this, The Progress Paradox: How Life Gets Better While People Feel Worse, which prompted Martin Seligman to invite him as a guest lecturer in an online course I was part of.

Elizabeth Dunn, a psychologist at the University of British Columbia, thought this might be because of the way people spend their money. “People often pour their increased wealth into pursuits that provide little in the way of lasting happiness.” They do things like buying flat screen TVs. Research has found over and over that you get a little jolt of pleasure from this, but it goes away pretty quickly. It turns out giving has more benefits. Also, just thinking about having more money makes people less likely to use it in ways that would make them happy (Vohs et al, 2006). And when a group similar to those in the third study below were asked to select the conditions in that study that would make them happier, they got it exactly backwards.

We’re actually not very good in general at predicting what will make us happy. One Harvard psychologist has devoted a lot of his research career to this. His engaging and witty best-seller is called Stumbling on Happiness, which I’ll definitely be talking about in a future post.

giftGetting back to Dunn and colleagues, who published their findings in March this year in Science, their research looked at this question in different ways by doing three separate studies. They concluded that buying stuff for yourself doesn’t make you happier, but spending money on other people does.

They surveyed 632 Americans, gave them standardized, validated measures of general happiness, and asked questions about income, spending on (1) bills and expenses, (2) gifts for themselves, (3) gifts for others, and (4) donations to charity. Spending on the first two categories was not related to happiness; spending on the second two categories was.

Next they looked at people who received a windfall profit-sharing bonus (mostly in the $3000-$7000 range), and how they spent it. General happiness measures were taken a month before and 6-8 weeks after. They reported what percentage of their bonus they spent on 6 different categories including “buying something for someone else” and “donating to charity.” High or low income didn’t affect the happiness measure, and the amount of the bonus didn’t either. But spending in the two “pro-social” categories I just mentioned predicted higher levels of happiness. How much people got wasn’t related to their happiness two months later. Spending it on others was.

A third study was an experiment which could demonstrate causality. Participants were given either $5 or $20 to spend by 5:00 p.m. and were randomly assigned to two groups. In one group they spent the money on a bill, an expense, or a gift for themselves, and in the other group they spent the money on a gift for someone else or to make a charitable donation. Those in the latter (pro-social spending) group had increased general happiness scores.

The researchers go on to say that it might be better to focus on “intentional activities” (“practices in which people actively and effortfully choose to engage”) in finding ways to increase happiness, rather than looking at life circumstances like income, gender, and religious affiliation. They also point out that a small change in spending habits can have a significant effect. Remember that in the third study, only $5 made a difference.

5 dollar bill

References:

Elizabeth W. Dunn, Lara B. Aknin, Michael I. Norton (March 2008), “Spending Money on Others Promotes Happiness,” Science 21: Vol. 319. no. 5870, pp. 1687-1688. DOI: 10.1126/science.1150952.

Kathleen D. Vohs, Nicole L. Mead, and Miranda R. Goode (November 2006), “The Psychological Consequences of Money,” Science 314: Vol. 314. no. 5802, pp. 1154-1156. DOI: 10.1126/science.1132491.

Gratitude Visit

Sunday, November 30th, 2008

In 2004, Martin Seligman told a group of us on a conference call that a specific exercise in which a person expresses gratitude was the single most effective intervention in the budding field of positive psychology, according to the limited research available on these new techniques.

At the University of Pennsylvania, Seligman teaches a course on positive psychology, and has his students plan and carry out a “Gratitude Visit” as an assignment. In his best-selling book Authentic Happiness: Using the New Positive Psychology to Realize Your Potential for Lasting FulfillmentAuthentic Happiness: Using the New Positive Psychology to Realize Your Potential for Lasting Fulfillment, Seligman says that in his course evaluations he gets comments like “October 25th was one of the best days of my life.” He recommends all readers to do the exercise, and gives the following instructions:

Select one important person from your past who has made a major positive difference in your life and to whom you have never fully expressed your thanks. (Do not confound this selection with new-found romantic love, or with the possibility of a future gain.) Write a testimonial just long enough to cover one laminated page. Take your time composing this; my students and I found ourselves taking several weeks, composing on buses and as we feel asleep at night. Invite that person to your home, or travel to that person’s home. It is important you do this face to face, not just in writing or on the phone. Do not tell the person the purpose of the visit in advance; a simple “I just want to see you” will suffice. Wine and cheese do not matter [he mentioned in the book that this was part of “Gratitude Night” where students brought guests to a joint event], but bring a laminated version of your testimonial with you as a gift. When all settles down, read your testimonial aloud slowly, with expression, and with eye contact. Then let the other person react unhurriedly. Reminisce together about the concrete events that make this person so important to you. (If you are so moved, please do send me a copy at Seligman@psych.upenn.edu)

There are a lot of ways in which giving works better than receiving for making you happier. The Gratitude Visit is a great way to enrich both giver and receiver. Try it! If you would like to send me a copy, I’d be happy to read it.

Seligman, M.E.P. (2002). Authentic Happiness: Using the New Positive Psychology to Realize Your Potential for Lasting FulfillmentAuthentic Happiness: Using the New Positive Psychology to Realize Your Potential for Lasting Fulfillment. New York: Free Press. p. 72-75.

Seligman, M.E.P., Steen, T., Park, N., & Peterson, C. (2005). Positive psychology progress: Empirical validation of interventions. American Psychologist, 60(5), 410-421.

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