The researchers hypothesized that, compared to spending money on ourselves, spending money on others will actually make us happier. 632 Americans were asked to rate their happiness, indicate their annual income and also estimate how they spend their money in a month, which was subsequently categorized into Personal Spending & Prosocial Spending.
- Personal Spending (Bills & expenses, Gifts for themselves) was not a significant predictor of happiness.
- Prosocial Spending (Gifts for others, Donations to charity) was a significant predictor of happiness.
- Personal Spending (Bills & expenses, Rent or mortgage, Buying something for themselves) was not a significant predictor of happiness at Time 2.
- Prosocial Spending (Buying something for someone else, Donating to charity, Other) was a significant predictor of happiness at Time 2.
- They also found that how the participants spend the bonus was more important than the size of the bonus.
- Participants who were in the Prosocial Spending condition reported greater happiness than participants who were in the Personal Spending condition.
- The size of the money ($5 or $20) did not have a significant effect on happiness.
- Allocate some of our spending on others (Gifts, donations etc.).
- The sum does not have to be big, even an amount of $5 when spent in a prosocial manner can result in significantly higher happiness levels.
- We can make ourselves happier than a person with a bigger bonus by simply tweaking how we spend our cash.
Dunn, E., Aknin, L., & Norton, M. (2008). Spending Money on Others Promotes Happiness Science, 319 (5870), 1687-1688 DOI: 10.1126/science.1150952