I’ve had a nagging suspicion that turned into more of a certainty after my incredible vacation in Guatemala, that spending money on experiences makes people happier than spending it on material goods. A $10 dance class (assuming you enjoy dance) makes you happier than a new T-shirt bought for the same price. A short but active trip abroad is more enjoyable than a new big-screen TV. Even a walk in the park with a friend on a nice sunny day contributes to our overall happiness, without costing us a penny.
I recently became so interested in this idea that I conducted a quick search for relevant studies online. Turns out, in 2009 Dr. Ryan Howell, a San Francisco State assistant professor, published a study that confirmed my hypothesis. In an NPR interview, Dr. Howell commented on his study, explaining that “participants who were in the experiential condition said that they were more likely to consider their money well-spent at that time but also that currently that their purchase was still making them happier, and it made others happier. And that was because they had an increased sense of vitality, an increased sense of vigor. And they also had a sense of being connected with their social world.” This sense of reinvigoration is exactly what I felt in Guatemala, and although months have passed, I continue to feel the remnants of it to this day. Dr. Howell also pointed out an interesting difference between experiential and material purchases: “people’s experiences – their vacations and their times out with their friends - aren’t susceptible to social comparisons.” You might be happy with your brand-new IPhone 3G until a few months later your co-workers buys the updated 3GS version, but a friend’s vacation in Europe is less likely to devalue your trip to Latin America in your own eyes.
Plenty of studies in the fields of psychology and economics have shown that, after a certain threshold of satisfying basic needs, additional income or wealth does not make people happier. What I’d like to see is a study of human happiness that takes into consideration not only income or wealth level but also spending tendencies. In other words, would two people who spend most of their income on experiences be equally happy at different income levels? And conversely, income and wealth held constant, are people who accummulate experiences happier than those who collect material possessions?
A similar study could be conducted on a macro level. Plenty of studies have shown that people in poorer countries are not necessarily less happy than their wealthy-nation peers. However, could this be partly due to a tendency on the part of the latter to spend their wealth on disposable material possessions, which in turn drives the economy? This kind of study would have implications not only on the argument about whether GDP is a good metric of happiness, but also on debate regarding national economic policy.
If anyone knows of already existing studies that answer the questions I’ve posed, or wants to conduct this type of study, please let me know.
