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 Economic downturn: Can money buy happiness?
POSTED 19 FEBRUARY 2009

Happy News

Happiness can spread through a social network like a disease. "We've found that your emotional state may depend on the emotional experiences of people you don't even know, who are two to three degrees removed from you," says Nicholas Christakis of Harvard Medical School.

The best things in life aren't things

To crank up our sluggish economy, we've been advised to buy something with whatever money we have left. Buying a new car or some furniture may help the economy, but can "shopping therapy" heal the blues you get from watching the unemployment rate or Dow-Jones Industrials? Perhaps not, according to studies that compare the outcome of buying material goods versus buying experiences -- a new TV versus an Acapulco vacation, a new George Foreman grill versus a cookout in the park.

Several researchers find that spending on experiences produces a bigger payoff in personal happiness, says Leaf Van Boven, associate professor of psychology and neuroscience at the University of Colorado. "We have been broadly interested in the question of whether there are different strategies that people can use to allocate resources in the pursuit of happiness," he explains. When experimental subjects are asked to describe the happiness resulting from a recent purchase, "We've found that people from all different kinds of backgrounds report that the experience they purchased made them happier than the material possessions."

A smiling young blonde woman holds up a gold purse embroidered with the words 'I [heart] bling.
Bling may make her smile, but does it make her happy?

Contemplating an experience "produced an increase in the positive mood state, while contemplating a material purchase actually produced a slight decrease in positive mood," Van Boven says.

Tropical foliage frames this photo of a small sunlit bay filled with white cabin cruiser boats
Photo: ©David Tenenbaum
Dollar for dollar, buying a family vacation on Mexico's Pacific Coast will bring more happiness than splurging on a giant television. Think of the memories, the reinforced social relationships...

Why would that be?

Several factors could explain the efficacy of experience, says Van Boven:

lil smiley faceMaterialism itself seems harmful. "Some psychologists have found that the more materialistic you are -- the more you believe that material goods can bring happiness -- the less happy you tend to be."

lil smiley faceThe common tendency to compare ("Your flat screen is bigger than mine!") can sabotage the pleasure of things.

lil smiley faceTime's patina can burnish the agonizing elements of an experience: After a soggy week camping in the rain, "you get some value by telling that story again and again."

lil smiley faceExperiences have lasting value, Van Boven adds. "We relive them, retell them, while material possessions decline in value."

lil smiley faceFinally, and critically, "Experiential pursuits tend to foster social relationships, and we know from other research that social relationship are a key predictor of happiness, satisfaction."

Here's more good news: The price tag may be irrelevant, Van Boven says. "Within the kind of purchases we study, we have not found a positive correlation between expense and the degree to which people are made happy." Many of the experiences are inherently cheap, such as backpacking or a family picnic.

With one hand grasping his ripcord, a BASE jumper leaps from a rail bridge into a canyon
Photo: Mr. M*
Here's an experience that won't soon be forgotten, assuming the jumper lives to embroider the tale!

In the current economic trauma, he adds, "If you are interested in cutting expenses and increasing the quality of life, you could imagine a strategy with a lot of inexpensive, pleasant activities with friends and family."

There is one exception, however. People with the lowest level of income and education tend to report greater happiness from material purchases, Van Boven says. "It may be that when people's resources are severely restrained, they are more focused on satisfying basic material needs, and that changes the way they think about this purchase-experience tradeoff."

And what happens if you are really poor?
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Terry Devitt, editor; Nathan Hebert, project assistant; S.V. Medaris, designer/illustrator; David Tenenbaum, feature writer; Amy Toburen, content development executive

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