As the greeting “Happy Holidays” hits your ears over and over during the holiday season, doesn’t it raise a question or two?
At a time when greed and acquisitiveness appear to be boundless, at least among certain segments of the American population, the most relevant questions seem to be:
- Does money buy happiness?
- If not, what does?
These questions have been the subject of countless studies. Let’s review a few of the answers they’ve come up with.
To begin, exactly what is it that makes us “happy”?
A couple of articles published in the past two years in The Wall Street Journal—a publication certainly focused on the acquisition of money—summarized some results.
Wealth alone doesn’t guarantee a good life. According to the Journal, what matters a lot more than a big income is how people spend it. For instance, giving money away makes people much happier than spending it on themselves. But when they do spend it on themselves, they’re a lot happier when they use it for experiences like travel rather than material goods.
The Journal looked at a study by Ryan Howell, an associate professor of psychology at San Francisco State University, which found that people may at first think material purchases offer better value for their money because they’re tangible and they last longer, while experiences are fleeting. But Howell found that when people looked back at their purchases, they realized that experiences actually provided better value. We even get more pleasure out of anticipating experiences than we do from anticipating the acquisition of material things.
Another psychology professor, Thomas Gilovich at Cornell, reached similar conclusions. He found that people make a rational calculation: “I can either go there, or I can have this. Going there may be great, but it’ll be over fast. But if I buy something, I’ll always have it.” According to Gilovich, that’s factually true, but not psychologically true, because we “adapt to our material goods.”
We “adapt” to our material goods? How? Psychologists like Gilovich talk about “hedonic adaptation.” Buying a new coat or a new car may provide a brief thrill, but we soon come to take it for granted. Experiences, on the other hand, meet more of our “underlying psychological needs.”
Why? Because they’re often shared with others, giving us a greater sense of connection, and they form a bigger part of our sense of identity. You also don’t feel that you’re trying to keep up with the Joneses quite so much. While it may bother you when you compare your material things to others’ things, comparing your vacation to someone else’s won’t bug you as much because “you still have your own experiences and your own memories.”
Another article in the Journal, published in 2015, focused on the findings of economists rather than psychologists. A group of economists like John Helliwell, a professor at the University of British Columbia, concluded that happiness—overall well-being–should not be measured by how much money we have by using metrics like per-capita income and gross domestic product (GDP). “GDP is not even a very good measure of economic well-being,” he said.
Instead, the World Happiness Report, which Helliwell co-authored, ranked countries based on how people viewed the quality of their lives. It noted that six factors account for 75 percent of the differences between countries. The six factors: GDP, life expectancy, generosity, social support, freedom, and corruption. Although GDP and life expectancy relate directly to income, the other four factors reflect a sense of security, trust, and autonomy. So although the U.S. ranked first in overall GDP, it ranked only 15th in happiness because it was weaker in the other five variables.
According to Jeffrey D. Sachs, a professor at Columbia and co-author of the World Happiness Report, incomes in the U.S. have risen, but the country’s sense of “social cohesion” has declined. The biggest factor contributing to this result is “distrust.” Although the U.S. is very rich, we’re not getting the benefits of all this affluence.
If you ask people whether they can trust other people, Sachs said, “the American answer has been in significant decline.” Forward to 2017. Today, when many of our political leaders shamelessly lie to us, our trust in others has no doubt eroded even further.
Even life expectancy is going downhill in the U.S. According to the AP, U.S. life expectancy was on the upswing for decades, but 2016 marked the first time in more than a half-century that it fell in two consecutive years.
Let’s return to our original question: whether money can buy happiness. The most recent research I’ve come across is a study done at Harvard Business School, noted in the November-December 2017 issue of Harvard Magazine. Led by assistant professor of business administration Ashley Whillans, it found that, in developed countries, people who trade money for time—by choosing to live closer to work, or to hire a housecleaner, for example–are happier. This was true across the socioeconomic spectrum.
According to Whillans, extensive research elsewhere has confirmed the positive emotional effects of taking vacations and going to the movies. But the Harvard researchers wanted to explore a new idea: whether buying ourselves out of negative experiences was another pathway to happiness.
Guess what: it was. One thing researchers focused on was “time stress” and how it affects happiness. They knew that higher-earners feel that every hour of their time is financially valuable. Like most things viewed as valuable, time is also perceived as scarce, and that scarcity translates into time stress, which can easily contribute to unhappiness.
The Harvard team surveyed U.S., Canadian, Danish, and Dutch residents, ranging from those who earned $30,000 a year to middle-class earners and millionaires. Canadian participants were given a sum of money—half to spend on a service that would save one to two hours, and half to spend on a material purchase like clothing or jewelry. Participants who made a time-saving purchase (like buying take-out food) were more likely to report positive feelings, and less likely to report feelings of time stress, than they did after their shopping sprees.
Whillans noted that in both Canada and the U.S., where busyness is “often flaunted as a status symbol,” opting for outsourcing jobs like cooking and cleaning can be culturally challenging. Why? Because people like to pretend they can do it all. Women in particular find themselves stuck in this situation. They have more educational opportunities and are likely to be making more money and holding more high-powered jobs, but their happiness is not increasing commensurately.
The Harvard team wants to explore this in the future. According to Whillans, the initial evidence shows that among couples who buy time, “both men and women feel less pulled between the demands of work and home life,” and that has a positive effect on their relationship. She hopes that her research will ameliorate some of the guilt both women and men may feel about paying a housekeeper or hiring someone to mow the law—or ordering Chinese take-out on Thursday nights.
Gee, Ashley, I’ve never felt guilty about doing any of that. Maybe that’s one reason why I’m a pretty happy person.
How about you?
Whatever your answer may be, I’ll join the throng and wish you HAPPY HOLIDAYS!