Can We Spend Our Way to Happiness?

 

As people become wealthier, they feel more pressed for time.

Elizabeth Dunn Professor, Department of Psychology, University of British Columbia; C...
Session

Can We Spend Our Way to Happiness?

Setup

It’s hard to be dispassionate about money. Whether we have a lot, not enough, or a comfortable amount of it, our emotional relationship with money is often fraught. Fascinating research on this subject reveals that luxury cars often provide no more pleasure than economy models, that commercials can actually enhance the enjoyment of watching television, and that residents of many cities frequently miss out on inexpensive pleasures in their hometowns. How can we change the way we think about money?

Buy your way out of the things you hate doing
Buy your way out of the things you hate doing
Driving your way to happiness: public vs. private consumption
Getting tired of your latest buy? Take a break from it.
The happiness trifecta
1.

Buy your way out of the things you hate doing

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07:33

When your paycheck grows and you take on more responsibility at work, it’s likely you feel more pressed for time. Elizabeth Dunn, professor of psychology at the University of British Columbia, says as people become wealthier they feel their time is short. “When our time becomes worth a lot of money, it can make us feel like we don’t have enough of it.” It’s because of a perceived association between scarcity and value. “Financial affluence can erode our sense of time affluence,” says Dunn.

Can We Spend Our Way to Happiness?  AIF 2019
Buy your way out of the things you hate doing

If you feel pressed for time, how can you find more happiness? Dunn says pay someone to do the tasks you hate doing. In a study of 800 millionaires in the Netherlands, half said they weren’t paying for help with things they didn’t like doing. “It suggests there’s this unrealized opportunity for people to buy their way out of the stuff that brings them down,” Dunn says. It could be cooking, cleaning, washing the dog — you name it! “If you can buy your way out of the most negative parts of your day, our research shows that’s a good strategy for promoting happiness.”

2.

Driving your way to happiness: public vs. private consumption

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11:18

Imagine you’re in a high-tax world and a low-tax world, and in both worlds you’re shopping for a car. Robert Frank, professor of management and economics at Cornell, says a low-tax world resident might have the means to buy a Ferrari but when he takes it for a spin, the road may be rough. In the high-tax world, the car a consumer purchases may not be as fancy but “at least some of that extra money is going to be spent on public investment so the roads will be maintained. So the real question is who’s happier — people in the high or low tax world? The people in the high tax world are happier because their roads aren’t riddled with potholes,” says Frank.

The mix of private and public consumption is one of the main determinants of differences in cross-country happiness.
Robert Frank
3.

Getting tired of your latest buy? Take a break from it.

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23:45

Are you already over the shoes you purchased last month? You’re not alone. Elizabeth Dunn says we adapt to the things we typically buy. “So the trick,” she says, “is to spend money in ways that slow down the pace of what we call hedonic adaptation, or this ability to get used to whatever we have.” If you’re intentional about taking a break, you’ll save and spend your money in more strategic ways. “If you choose to go back to [the item you purchased], you’ll be able to approach it with fresh eyes that can appreciate it the way you did originally.”

Adrienne LaFrance AIF 2019
Getting tired of your latest buy? Take a break from it.

4.

The happiness trifecta

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25:30

Happiness includes three key components, according to researcher Elizabeth Dunn. The first: life satisfaction. “Are you living the life you want to be living?,” she asks. Secondly, how much positive emotion are you experiencing on a day to day basis? Are you laughing and smiling? Finally, says Dunn, how much negative emotion are you experiencing? “We would never say that to be happy, you need to never experience negative emotions. Everybody experiences negative emotion.”

People who score high on this overall measure of happiness are those who are experiencing a preponderance of positive emotions relative to negative emotions, and who feel this satisfaction with their lives. In general, these three components are like the triumvirate of happiness.
Elizabeth Dunn

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Additional Information

Resources

Luxury Fever: Weighing the Cost of Excess

Happy Money: The Science of Happier Spending

Five ways money can buy you happiness

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