…but not as you might guess.
In 2012, Michael Norton gave a TED Talk, How to Buy Happiness, which focused on his research and conclusion that money can indeed buy happiness – when you don’t spend it on yourself. He wanted to find out what happens when people are prosocial with their money and give it away, instead of spending it on themselves. Of particular interest was the correlation of this prosocial spending with the participants’ happiness factor.
Two important highlights of the research and the TED Talk:
“Spending on other people has a bigger return for you than spending on yourself.”
AND
“The specific way that you spend on other people isn’t nearly as important as the fact that you spend on other people.”
Norton, who holds a Ph.D. in Psychology from Princeton and is an Associate Professor of Business Administration at the Harvard Business School, set up experiments in 136 countries. First, to establish a “happiness baseline,” he took a pulse on how happy the participants were. Then, he distributed money: one group had to spend the money on themselves, and the other group had to spend the money on others.
The results were overwhelmingly similar, no matter the country, age, race, or socio-economic class of the participants — those who spent the money on others reported a greater sense of happiness (compared to their baseline) while the “happiness factor” of those who spent it on themselves stayed the same as before. The research showed that it does not matter how much money you spend — what does matter is that you spend it on someone other than yourself.
It was fascinating to see the differences in how people around the world spent their money. To be clear, we’re not suggesting that you give all of your money away! However, philanthropy might be an important and possibly missing component of your current situation.
We think you’ll enjoy watching the TED Talk.