It's been a week of serendipity on the whole business of giving and getting. There was the Kiva thing, and a wonderful TedTalk from Isabel Allende, which I didn't blog but which moved me enormously. And all the while, I've had a secret burning a hole in me.

Scientific proof: "Spending Money on Others Promotes Happiness". 1

Elizabeth Dunn and her colleagues have conducted a really rather fine study that starts from the somewhat counterintuitive observation (at least to some) that money does not actually buy much happiness. “Income has a reliable, but surprisingly weak, effect on happiness within nations, particularly once basic needs are met.”

Step one: what does predict happiness? Dunn and colleagues surveyed 632 Americans and asked how much they earned, how much they spent on themselves, how much they spent on others, and how happy they were. Personal spending was unrelated to happiness, while spending on others (gifts for others and donations to charity, lumped as “prosocial spending”) was correlated with happiness. Income had no effect on the lack of relationship between personal spending and happiness.

Step two (correlation is not causation): how you spend money (even if it isn’t income) affects happiness. The researchers measured the happiness of 16 employees a month before they received their annual bonuses. About seven weeks later, the employees again rated how happy they were, and indicated how they had spent the bonus, again on personal or prosocial spending. Spending on others, but not initial happiness, predicted later happiness. Neither initial income nor amount of bonus had any impact on the relationship between prosocial spending and happiness.

Employees who devoted more of their bonus to prosocial spending experienced greater happiness after receiving the bonus, and the manner in which they spent that bonus was a more important predictor of their happiness than the size of the bonus itself.

Step three: let’s get experimental. Students (who else?) rated their happiness in the morning and were then given either $5 or $20 and told to spend it by 5 pm that day. Some were told to spend it “on a bill, an expense, or a gift for themselves”. The rest to spend it on a gift for someone else or a charitable donation. At 5 pm they rated happiness again. Only the nature of the spending had any effect on happiness, which was independent of both the amount of the windfall and the interaction between amount and instructions. Spending on others really does seem to promote happiness more than spending on oneself.

There's more to the paper -- like the fact that other students -- told about the conditions of the final experiment and asked to judge which circumstances would increase happiness were “doubly wrong”. They thought $20 would make them happier than $5 and that spending on themselves would make them happier than spending on others.

Astonishing, isn’t it? You can buy happiness, but only by buying something for someone else. Go put that to work.

And happy Vernal Equinox.

  1. Dunn, E.W., Aknin, L.B., Norton, M.I. (2008). Spending Money on Others Promotes Happiness. Science, 319(5870), 1687-1688. DOI: 10.1126/science.1150952  

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