Study Summary — Spending Money on Others Promotes Happiness

Link to the study: Spending Money on Others Promotes Happiness

Key points:

• Several scientific studies on the psychological aftereffects of spending money on oneself, and spending money on others, strongly suggest that the former action leads to higher levels of lasting happiness.
• Spending money on gifts for oneself usually leads to a temporary spike in happiness. Spending money on gifts for others usually leads to long term elevations in the happiness of the gift buyer.
• Side note: There is a link between income and happiness. The two seem to be closely linked until income surpasses approximately $75,000 dollars per year. After this point, increases in income become decoupled with increases in self-reported happiness.

Excerpts:

• “…this study provides initial evidence that how people spend their money may be as important for their happiness as how much money they earn — and that spending money on others might represent a more effective route to happiness than spending money on oneself.”
• “…employees who devoted more of their bonus to prosocial spending experienced greater happiness after receiving the bonus, and the manner in which they spent that bonus was a more important predictor of their happiness than the size of the bonus itself.”
• “These experimental results provide direct support for our causal argument that spending money on others promotes happiness more than spending money on oneself.”