This is a guest post by Jennifer Jeffrey, a third-year PhD candidate in Marketing at the Ivey School of Business and the current S. C. Torno PhD Scholarship Award Holder. Jen's research interests include the effects of negative affect on persuasive appeals and the impact of authenticity on endorser effectiveness.
There are lots of reasons why I’m a little envious of the big guy’s job: a flying sleigh, a legion of elves at his disposal, and unlimited access to fresh-baked cookies…really, what’s not to like? It turns out, however, that there’s an even better reason to lust after Santa’s job: the oodles of happiness it must surely bring with it.
Elizabeth Dunn, Michael Norton, and Lara Aknin have spent considerable time researching the age-old question of whether money can truly buy you happiness. The results of their research suggest that it can, with one big caveat; you need to spend that money on other people if you want to increase your happiness.
Dunn, Norton, and Aknin started researching the topic of happiness through a series of surveys, looking for the relationship between spending patterns and reported happiness levels. For example, in one study they looked at employees who received an annual bonus, measuring their happiness prior to receiving that bonus and then eight weeks later. What they found is that employees who had spent their bonuses paying bills, mortgages, or purchases for themselves reported similar happiness levels after their bonus spending sprees to before. Those employees, however, who had spent more of their bonuses on purchases for other people and on charitable contributions actually reported increases in their happiness levels at follow-up.
These findings were further tested through several field experiments, where participants were randomly given a sealed envelope containing either $5 or $20, and the instructions to either spend that money on themselves or on others by the end of the day. Happiness levels were recorded at baseline, prior to anyone receiving their envelope, and again after the money had been spent. As the researchers predicted, the amount of money given out had no impact on later reported happiness levels, but the manner in which the money had been spent sure did. Those participants who had spent the money on themselves reported no difference in happiness after their unexpected windfall, whereas those who spent the money on others reported a significant bump in their overall happiness levels.
Subsequent studies showed that spending money on close others yields the highest happiness returns, versus on more casual friends and acquaintances.
Why do we find these results surprising? It appears that many of our lay beliefs about money may just not be accurate. For example, Dunn, Norton, and Aknin also found that in general we overestimate the impact that money has on happiness, assuming erroneously that big salary increases lead to big happiness increases and that the poor must also be significantly less happy than the wealthy. We also assume that spending on ourselves is the quickest route to happiness (in spite of what many of our grandmothers have told us!). When the researchers presented a new group of people with the same four options as in their original field experiment and asked them which option would make them happiest, most assumed that more money equaled more happiness, and that money spent on themselves was the best choice.
As the holiday season approaches, many of us are dreading the busy shopping malls, hours of gift wrapping, and inevitable shock of that January VISA bill arriving at our doorsteps. But lest the thought of shopping for others start bringing out the Scrooge in you, take a page from Santa’s book. It turns out the reason he’s so darn jolly isn’t the cookies or the flying sleigh, but rather it’s from the happiness he gets giving others so many gifts. As you fight through the crowds and the stores this December, take some comfort in the fact that the more you harness your own inner Santa this year, the happier you too will be.
Dr. Michael Norton will be presenting some of his research at Western University on November 30th.
Aknin, L.B., Norton, M.I., & Dunn, E.W. (2009), From wealth to well-being? Money matters, but less than people think. The Journal of Positive Psychology, 4(6), 523-527.
Aknin, L.B., Sandstrom, G.M., Dunn, E.W., & Norton, M.I. (2011), It’s the Recipient That Counts: Spending Money on Strong Social Ties Leads to Greater Happiness than Spending on Weak Social Ties, PLoS ONE, 6(2), e17018.
Dunn, E.W., Aknin, L.B., & Norton, M.I. (2008), Spending Money on Others Promotes Happiness, Science, 319, 1687-1688.