Thursday, March 20, 2008

Money Can Buy Happiness!

Ed at Not Exactly Rocket Science reports on new studies that show that while income is generally not very important to aperson's happiness, people who give lots of mony away to charities or other people are quite happy. The moral: money can buy you happiness if you give it away:

Across and within countries, income has an incredibly weak effect on happiness once people have enough to secure basic needs and standards of living. Once people are lifted out of abject poverty and thrown into the middle class, any extra earnings do little to improve their joie de vivre. Time trends tell a similar story; even developed countries that have enjoyed economic booms have seen plateauing levels of satisfaction.

But a new study reveals that money can indeed buy happiness... if it's spent on others. Elizabeth Dunn from the University of British Columbia wanted to see if there were ways of channelling the inevitable pursuit of money towards actually making people happier. Together with Lara Aknin and Michael Norton, she asked a representative group of 632 Americans to disclose their average monthly expenditure and to rate how happy they were.


She found that personal spending, including bills, living expenses and treats for oneself, made up 90% of the average outgoings but had no bearing on satisfaction. On the other hand, people who spent more money on others by way of gifts or charitable donations, were much happier for it. That either suggests that selfless spending increases happiness, or just that happier people are more likely to plump up more money for friends or charities.


Dunn sought out firmer conclusions by watching what happened to people who received an unexpected windfall. She surveyed 16 employees at a Boston firm who were given a bonus that ranged from $3,000 to $8,000. About two months later, Dunn grilled them about how they had spent the money and again, regardless of the size of the bonus, those who devoted more of their windfalls to selfless ends ended up happier, while those who splashed out on themselves did not. To paraphrase a saying, it's not how much you have, it's what you do with it that counts.


Finally, Dunn tested this theory through an experiment. She gave 46 people either $5 of $20, and an afternoon to spend it. Half of the lucky volunteers were told to splurge on themselves, while the other half had to buy a gift for someone else or to give the money to charity. By the evening, the charitable individuals felt happier than they did in the morning while the self-spenders did not, regardless of which bill they were given, and despite the fact that they were acting on instructions.



Read it all here.

So, feeling blue? Write a check to your favorite charity.

No comments: