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Giving money away can buy happiness, research finds

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source: http://www.canada.com/vancouversun/news/st...97-698952dff040

Giving money away can buy happiness, research finds

Randy Shore

Vancouver Sun

Friday, March 21, 2008

Money can buy happiness, according to a study by University of B.C. psychologist Elizabeth Dunn. Even spending $5 in the right way can make you happier.

But people usually get it wrong when they try.

Dunn had always been nagged by the notion that money can't buy happiness. Reliable research across the developed world finds that once a person's basic needs are being met, surging incomes are only marginally related to happiness. A wealthy nation is not necessarily a happy nation.

People usually predict that spending on themselves will make them happy, but it doesn't.

"I wondered if maybe we just weren't doing it right," Dunn said.

Dunn and her colleagues -- UBC grad student Lara Aknin and Harvard researcher Michael Norton -- designed and conducted a survey on money, happiness and giving.

They found greater happiness among people who give money to charity and buy gifts for friends, regardless of income.

But does giving, what researchers call pro-social behaviour, actually cause happiness?

"Money seems to be an effective vehicle for accomplishing pro-social goals and that is strongly associated with happiness," she said. "So we wanted to find how people could do it right."

The researchers measured the happiness of middle-income employees at a Boston-area health industry firm before and after the employees received profit-sharing bonuses of $3,000 to $8,000.

People were happier after spending their windfall, but only if they spent it on others, Dunn said.

"It was a remarkably strong effect," said Dunn. "So strong that we had other people analyse the data again just to make sure."

In the third leg of the study, people were given either $5 or $20. Some were told to spend the money on something for themselves; others to donate the money to a charity or buy a gift for someone else.

Pro-social spenders were happier at the end of the day than selfish spenders and it didn't matter one bit whether they spent $5 or $20, so long as it was for the benefit of others.

"You don't have to go out and get some high-paying job so that you can spend thousands of dollars on other people," said Dunn. "It may be enough to think about how you spend $5 in a day."

Making those kinds of decisions is not as easy as it sounds. Earlier studies done mainly at UBC have found that even thinking about money -- let alone earning lots of it -- makes people less likely to donate to charity or to spend time with others, both of which are strongly associated with happiness.

"Money seems to subvert the pro-social choices that we could make," Aknin explained. Darn human nature, anyway.

On the other hand, making the "right decision" with money seems to promote self-esteem, Aknin said. In other words, if doing something would make your mother proud of you, it's probably going to make you feel good.

"Money is a great tool for making the world a better place," said Aknin. "So hopefully this will impact the way people spend money and they can be happier as a result."

"My mom is very proud of this research," she admitted.

Oprah Winfrey -- her finger always on the pulse of North American trends -- has taken the idea of giving and the happiness that it spreads to unimaginable heights with The Big Give. People who appear on the show -- ordinary citizens and celebrities -- compete to see who can spend money charitably fastest and for maximum impact.

The last episode of The Big Give drew about 12 million viewers; the woman's grasp on popular consciousness is nothing short of magic.

Pro-social giving needn't be about cash. Thoughtfulness counts. Dunn put theory into practice recently after her boyfriend gave her six dozen roses to celebrate their anniversary. Dunn in turn tried to give one rose to six dozen people, spreading the happiness windfall far and wide.


© The Vancouver Sun 2008

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