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Understanding the Complex Relationship Between Money and Happiness

Do you really need a lot of stuff to be happy? Science says that the opposite is true.

Michael Norton: My colleague Liz Dunn at University of British Columbia and I have been studying the relationship with between money and happiness. And it seems like a simple relationship, which is: we want more money and we want more happiness, so maybe if we get more money we’ll get more happiness. 

And it turns out that the relationship is really a lot more complicated than that. 

It’s not too surprising to say that money can’t buy you happiness, we’ve heard that phrase a lot. But that doesn’t help us understand then what kind of spending will actually make us happy and what kind won’t. What we tend to find when we look at the data is that the biggest category of things that people spend on is stuff for themselves. 

Of course we need to pay rent or our mortgage, we need to have a car, we need to have food and clothes, but it seems as though people are spending an inordinate amount of their money on stuff for themselves, and the biggest problem from our standpoint as psychologists is the percent of money that you spend on stuff for yourself is completely uncorrelated with how happy you are with your life. 

It doesn’t make you unhappy, it’s not like if you buy a lot of stuff you’re miserable, which sometimes we think is the case—it’s just the case that it’s flat. No matter how much it seems you buy for yourself, nothing really seems to happen.

And so in our research, and other researchers as well, we’ve tried to look at, well, if stuff for yourself doesn’t pay off are there other things that you can spend your money on that actually do pay off in more happiness? 

And what Liz and I have focused on the most is this idea that instead of focusing on yourself all the time, which doesn’t seem to pay off in happiness, when you focus on other people you sort of reverse the arrow from me to you, it seems that on average when people give to others—which can be giving to charity, it can be treating a friend to lunch, it can be buying people gifts—that those actions of giving rather than keeping seem to be associated with more happiness. 

And when we send people out and give them money and tell them to spend it on themselves or spend it on somebody else, people who spend it on themselves kind of have the same day they would’ve had anyway, but people who spend on other people actually have a happier day. 

So, if you think about the idea that stuff for yourself doesn’t make you happy you can think of two opposites of that. One is stuff for other people, so that’s kind of giving makes you happier than keeping, but another opposite of stuff for yourself is to think about: you can still spend on yourself but change from stuff to something else. 

And lots of research over the last decade has shown that on average when people buy experiences it tends to pay off in more happiness than buying stuff for themselves. And if you think about it there’s a lot of reasons for that. 

One of them, which is really critical, is often when we buy stuff for ourselves we end up by ourselves with our stuff. Think of yourself on your phone playing a video game or whatever else it might be, you’re often alone with your stuff. 

Whereas experiences, yes we do some experiences solo, but many, many experiences have built into them that they’re social. 

If we go out to dinner or go see a movie or go on a hike or whatever else it might be, now we’re with other people and even though people sometimes annoy us a lot it turns out that talking to other people makes us happy, even casual interactions with other people make us happier than sitting by ourselves in a room. 

So experiences are more interesting and all those things, but they also actually kind of serve to commit us to spending time with other people, and that’s partly why experiences pay off in so much more happiness. 

Rapper Notorious B.I.G. perhaps put it best... "the mo' money you make, the mo' problems you get." While most of us aren't hip-hop demigods, we all have experience spending money on things that we think in the moment will make us happy but end up being... just stuff. Because when people accumulate wealth, they tend to spend it on themselves. This might make you temporarily happy but it largely means that you spend more time alone with the things that you've bought. But Harvard Professor (and Harvard’s Behavioral Insights Group member) Michael Norton has found that the more people spend on other people or in an experiential way—be it a concert ticket or simply taking a friend out for lunch—the happier they are overall. Michael's has co-written a book that covers this and other subjects called Happy Money: The Science of Happier Spending. Professor Norton’s studies are cited in The Influential Mind: What the Brain Reveals About Our Power to Change Others by Tali Sharot.

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Technology & Innovation
  • Duke University researchers created a hydrogel that appears to be as strong and flexible as human cartilage.
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Predicting PTSD symptoms becomes possible with a new test

An algorithm may allow doctors to assess PTSD candidates for early intervention after traumatic ER visits.

Image source: camillo jimenez/Unsplash
Technology & Innovation
  • 10-15% of people visiting emergency rooms eventually develop symptoms of long-lasting PTSD.
  • Early treatment is available but there's been no way to tell who needs it.
  • Using clinical data already being collected, machine learning can identify who's at risk.

The psychological scars a traumatic experience can leave behind may have a more profound effect on a person than the original traumatic experience. Long after an acute emergency is resolved, victims of post-traumatic stress disorder (PTSD) continue to suffer its consequences.

In the U.S. some 30 million patients are annually treated in emergency departments (EDs) for a range of traumatic injuries. Add to that urgent admissions to the ED with the onset of COVID-19 symptoms. Health experts predict that some 10 percent to 15 percent of these people will develop long-lasting PTSD within a year of the initial incident. While there are interventions that can help individuals avoid PTSD, there's been no reliable way to identify those most likely to need it.

That may now have changed. A multi-disciplinary team of researchers has developed a method for predicting who is most likely to develop PTSD after a traumatic emergency-room experience. Their study is published in the journal Nature Medicine.

70 data points and machine learning

nurse wrapping patient's arm

Image source: Creators Collective/Unsplash

Study lead author Katharina Schultebraucks of Columbia University's Department Vagelos College of Physicians and Surgeons says:

"For many trauma patients, the ED visit is often their sole contact with the health care system. The time immediately after a traumatic injury is a critical window for identifying people at risk for PTSD and arranging appropriate follow-up treatment. The earlier we can treat those at risk, the better the likely outcomes."

The new PTSD test uses machine learning and 70 clinical data points plus a clinical stress-level assessment to develop a PTSD score for an individual that identifies their risk of acquiring the condition.

Among the 70 data points are stress hormone levels, inflammatory signals, high blood pressure, and an anxiety-level assessment. Says Schultebraucks, "We selected measures that are routinely collected in the ED and logged in the electronic medical record, plus answers to a few short questions about the psychological stress response. The idea was to create a tool that would be universally available and would add little burden to ED personnel."

Researchers used data from adult trauma survivors in Atlanta, Georgia (377 individuals) and New York City (221 individuals) to test their system.

Of this cohort, 90 percent of those predicted to be at high risk developed long-lasting PTSD symptoms within a year of the initial traumatic event — just 5 percent of people who never developed PTSD symptoms had been erroneously identified as being at risk.

On the other side of the coin, 29 percent of individuals were 'false negatives," tagged by the algorithm as not being at risk of PTSD, but then developing symptoms.

Going forward

person leaning their head on another's shoulder

Image source: Külli Kittus/Unsplash

Schultebraucks looks forward to more testing as the researchers continue to refine their algorithm and to instill confidence in the approach among ED clinicians: "Because previous models for predicting PTSD risk have not been validated in independent samples like our model, they haven't been adopted in clinical practice." She expects that, "Testing and validation of our model in larger samples will be necessary for the algorithm to be ready-to-use in the general population."

"Currently only 7% of level-1 trauma centers routinely screen for PTSD," notes Schultebraucks. "We hope that the algorithm will provide ED clinicians with a rapid, automatic readout that they could use for discharge planning and the prevention of PTSD." She envisions the algorithm being implemented in the future as a feature of electronic medical records.

The researchers also plan to test their algorithm at predicting PTSD in people whose traumatic experiences come in the form of health events such as heart attacks and strokes, as opposed to visits to the emergency department.

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Physicists have understood at least theoretically, that there may be higher dimensions, besides our normal three. The first clue came in 1905 when Einstein developed his theory of special relativity. Of course, by dimensions we’re talking about length, width, and height. Generally speaking, when we talk about a fourth dimension, it’s considered space-time. But here, physicists mean a spatial dimension beyond the normal three, not a parallel universe, as such dimensions are mistaken for in popular sci-fi shows.

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