Spending money on experiences instead of objects makes you happier

This is a popular idea, has gotten good coverage, most recently in FastCo. Leaf Van Boven has been doing great work on this for years. (He was Gilovich's graduate student – the FastCo article quotes Gilovich a lot because it's based on a new review article by Gilovich & Kumar.)

One of the things I want to nail in my book is the limited relevance of main effects. Meaning, statements like "X makes people happier", "Y is good for you", "Z is bad for you", "Self-esteem predicts bullying", and of course the FastCo title: "The Science of Why You Should Spend Your Money on Experiences, Not Things."

There's a systematic problem in the coarseness and lack of utility of main effects in social science, and in a lot of biomedical work. There are many different issues at play, at different levels of analysis, that make the above statements problematic (the epistemic and methodological problems with "X makes people happier" are different from the problems with claims like "Self-esteem predicts bullying".)

But let's focus on this story on the science of why you should spend your money on experiences rather than things...

34% of you should not do this.

Let's backtrack to the studies. This is often measured by asking people what made them happier in retrospect, which is probably a valid way of measuring this question (there are probably several valid ways of getting at this.)

Do you think 100% of people reported that experiences made them happier than purchases? Probably not. We never get universality in social psychology or positive psychology research. I think science writers should linger on these sorts of questions and should get the actual percentages for the effects they report (my new website will make these sorts of issues more salient and not dependent on a particular post.)

In one of the flagship studies on this (Van Boven & Gilovich, 2003), 57% of participants reported that an experience made them happier than a purchase (they were asked to think of one of each, where their motivation for the purchase or experience had been to increase their happiness.)

34% rated the purchase as making them happier than the experience. (The remainder were Not Sure or declined to answer. Also, I'm using "purchase" to mean purchase of a thing or object.)

So, if you read this article at FastCo – or similar articles at the NYT or Slate – and you act on it, spending your money on experiences instead of purchasing something you've treasured, 34% of you will be less happy than you would've been if you had bought whatever you wanted to buy.

We might even say 34% of you will be less happy than if you had never read the article, if it changed your decision. That's interesting.

It may not matter much, but it could. Qualifiers include:

-- "Less happy" is not necessarily unhappy. What was measured in this study was people's choices of which made them happier. In a lot of cases, both experiences and purchases might have made them happy, but one just made them happier than the other. (The mean score in how happy a purchase made them was above the midpoint at 6.62 on a 1 – 9 scale, and experiences were at 7.51. Different study, same paper.)

-- This is recalled, reflective judgement of what made them happier. I don't know much about any literature on the validity or nature of recalled happiness grading. I assume it's not as unreliable as predicting what will make us happy (see Dan Gilbert's excellent work there.)

-- There are likely to be all sorts of contextual effects and circumstances that dictate one's choices. Happiness as a concept may not be commensurable across individuals, and it certainly doesn't have to be the most important consideration. I think this reality sometimes gets lost in positive psychology – people don't have to care a lot about happiness. They might care about meaning or some other value more than happiness. They might care about the happiness of other people, like their spouses or children, more than their own (though making them happy would presumably make oneself happy in that case.) In fact, suffering can be very valuable. There seems to be an intolerance for suffering implied in positive psychology and in modern politics. I think suffering might be getting short shrift.

Obviously, this can all be very complicated, and the right decisions for you might be heavily and consciously influenced by your philosophy, values, or faith. Certainly what is happening when people answer a question like “When you think about these two purchases, which makes you happier?” might be very complicated.

But say we keep it simple. The headline and article only apply to 57% of people, if we take everything at face value, assume that readers of the article are very similar on average to the samples used in the studies, and so forth.

(This was an excellent sample, as it was a random digit dialing survey by professionals at Harris Interactive, so we don't have to worry about people making claims about human nature based on research using college students. It was conducted in 2000, so random digit dialing was quite valid – landlines were still common.)

This phenomenon of the media reporting an effect as though it applies to everyone is recurrent. And a lot of times, the percentage of the population to whom it applies is not very large, maybe a slim majority like 57%. Sometimes, it will be a minority – a minority of the sample can drive an effect, whether it's a correlation or a difference between experimental groups. In this case, it could easily have been that 40% were happier from experiences, 34% were happier from purchases, and the rest were don't know/no opinion. That's a very normal outcome.

Note that the researchers dig into the factors that shape the effects – Gilovich and Kumar address the heterogeneity, and Van Boven has done lots of work getting at moderators. I'm focused on how findings are communicated and simplified by the media. This isn't a scandal or anything – lots of people might live better lives because they read about this research. Some people might be worse off if they make decisions based on what they think science says they should do. It's complicated, and I don't have any easy answers.

Broader tangent:

Part of the story here is hedonic adaptation, how we can be happy for a time with some new circumstance or purchase, but over time our happiness returns to baseline – the thing that made us happier doesn't do much for us anymore. Researchers have noted we don't seem to be getting happier across generations, and the implication is that we should be (because our objective standard of living is much higher.) I've always found that strange, and discuss it my chapter on measuring well-being. For one thing, the baseline is happiness – most people report being slightly or somewhat happy, and mean happiness is above the midpoint. Given the way we measure happiness, there isn't a lot of room to capture movement upward, for a number of reasons.

Second, it's not clear to me why we would want or need more happiness. I certainly wouldn't think it would be wonderful if people were maximally happy all the time. We have negative emotions for a reason – lots of reasons, really. The environment is not neutral with respect to our well-being, and it's certainly not the kind of place where we could be super happy all the time and still function as organisms. Mild happiness might be optimal for a civilization – I don't really have a strong position there, but assuming that the mean level of happiness should be some value X, or in some range R, that is different from the status quo is a pretty big assumption. I think it would need some justification.