Undercover Economist

January 24, 2014 7:19 pm

What makes us happy?

‘A growing body of research backs the folk wisdom that experiences make us happier than possessions’
Illustration by Raymond Biesinger of a man with a parachute©Raymond Biesinger

It has become a cliché to say that we are made happier by experiences than by material possessions – otherwise the Onion headline, “Executive Quits Fast Track To Spend More Time With Possessions” wouldn’t provoke quite the same chuckle.

But is the cliché true? We are all free to spend our disposable income on what we like. If the experiences we buy tend to make us happier than the possessions we buy, we’re making systematic mistakes. That’s possible – but if so, then why?

Maybe it isn’t a fair comparison. Many material possessions are workaday basics such as saucepans, ironing boards and socks. Many experiences are free, meaning the ones that cost money are treats – no wonder the average possession looks joyless compared with the few special experiences we’ve bought. It doesn’t follow that a windfall should definitely be spent on a spa weekend rather than an iPad.

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Undercover Economist

Another possibility is that causation is backwards. Perhaps happy people buy experiences, rather than experiences buying happiness. A recent study by three psychologists, Ryan T Howell, Paulina Pchelin and Ravi Iyer, gives a sense of how this might be possible: they found that people with a tendency to spend money on experiences were already emotionally appreciative of the world; they also tended to buy more experiences the happier they became.

To complicate matters, the difference between a material possession and an experience is not straightforward. My daughters were given a board game for Christmas. Is the game a possession or an experience? It is certainly no fun if it stays in the box – does that fact count for or against the hypothesis that experiences make us happier?

Then there’s the question of whether only wholesome experiences count. Gambling is an experience anyone can buy, and yet when I read articles extolling the virtues of buying experiences they usually seem to be thinking of a parachute jump. If daytime television and time on the slots don’t count as life experiences, then this comparison is rigged.

All that said, a growing body of research backs the folk wisdom that experiences make us happier. Leaf van Boven of the University of Colorado at Boulder and Thomas Gilovich of Cornell University conducted surveys of how people felt about their possessions and experiences, publishing their findings in 2003. They asked their subjects – who were students – to focus either on “life experiences” or “tangible objects” they had purchased with the aim of advancing their “happiness and enjoyment of life”. The students were asked to describe how happy these purchases had made them.

The result: life experiences do indeed make students happier. A wider poll suggested that was true more broadly, although less so for low-income respondents; poorer people seem to enjoy material possessions perfectly well.

Yet if the effect is real, then why don’t we shift our disposable income to buy extra experiences and fewer possessions? Or work fewer hours to free up time to enjoy experiences? Two suggestions. One is that experiences grand enough to count as “life experiences” are often social. We wear our new watch alone but go on holiday with friends. Recent work by Peter Caprariello and Harry Reis suggests that what really underpins the happiness brought by experiences is this social element.

Perhaps, too, our fondness for experiences is a function of the way we remember them. The irritations of the weekend mini-break or the boring bits of the opera trip are quickly forgotten: only the rosy glow remains. In contrast, our possessions do not gracefully withdraw into memory. We experience the once-fashionable cardigan not as nostalgic recollection but as an object that occupies wardrobe space while starting to bobble, shrink and fade.

‘The Undercover Economist Strikes Back’, by Tim Harford, is published by Little, Brown

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