Money can’t buy happiness, but it can rent it for a long time. Knowing this, a great deal of effort has been spent trying to find out how to maximize the happiness we get out of the money we spend. Lately, it has been almost cliché to mention how studies show buying experiences is better for happiness than buying things. However, new research reveals a glaring problem with that cliché.
The thing about things
A paper recently published in Psychological Science by Jacob C. Lee, Deborah Hall, and Wendy Wood questions the methods of previous studies which tend to use relatively affluent college students as guinea pigs. The goal of the study was to see if the results of previous tests held up when less affluent people were included.
The researchers asked their test subjects to answer questions about their income, job, and education level. The subjects were then categorized according to their answers to give a sense of their social class using the MacArthur Scale of Subjective Social Status.
The three tests began. The subjects were first asked to recall a recent purchase of a material item and an experience. That purchase was then ranked on a scale showing how happy it made them and placed on a range from “definitely experiential” to “definitely object.”
The data was clear, while the higher-class participants were made happiest by material purchases, the lower-class participants were made happiest by purchasing objects.
In the second test, the participants were randomly assigned to recall either a material or experiential purchase they had made and rate how happy it had made them. Again, the higher-class test subjects said they were made happiest by purchasing experiences while lower-class subjects favored material goods.
In the last test, the participants were again asked to recall either a material or experiential purchase, and then imagine that their income was either raised or lowered by 50%. They were then asked to consider how they would alter their budget given this change and how it would make them feel to have this shock to their finances occur.
After imagining that their finances had changed for a bit, they were then asked to consider how happy either a material or experiential purchase would make them. Some participants were told to think of the same items they had thought of at the start of the task and others were told to think of new ones they could make at their new, imagined, income level.
While the effect was minor, there was a tendency for people to favor buying experiences when they imagined their finances improving and buying goods when their condition worsened.
What does this all mean?
When money is tight, buying material things makes us happier than buying experiences. When we’re rolling in cash, it’s the other way around.
Writer Juliet Hodges suggests that the findings relate to how much leisure time we have. The idea being that well-off people will need to buy experiences to fill it while worse-off people would want items that save time. This idea is based on several studies that show how much happier people are made by time-saving purchases.
It should be noted though that the study was based on people remembering how happy their purchases made them. This reduces the reliability of the study since memory can be faulty. However, the basic finding of the study is supported by the last test even without appealing to memory.
So, what should I do if I’m in the lower class?
Don’t think that you can’t be happy because you know buying experiences is irresponsible given your current condition. The best thing to do, from a purely cost benefits stance, is to buy the things you need. The happiness payoff will be just as good as if you had bought an overpriced night out instead.
Wasn’t this obvious?
It seems kind of obvious that people who don’t have enough money for extravagant experiential purchases might get more happiness out of having certain things, some of which might be desperately needed. However, previous studies into this idea had not taken income levels into account and tended to have test subjects who were more affluent than the rest of the population.
It is yet another example of a phenomenon that was only studied in certain groups; leading us to have an incorrect idea about how other people were affected. The tendency to use college students as guinea pigs happens so much there is even an acronym for the typical test subject: WEIRD.
Having more things doesn’t always equal more happiness, but not having anything isn’t much fun either. This paper reminds us that studies on how money can influence happiness must take care to remember people without money too.