Money Can't Buy Love. But It Can Buy Happiness!

Can money buy happiness? As a matter of fact, it can. But not in the way you might think.

Professor Michael Norton at the Harvard Business School did a series of fun experiments that found that if you spend money right, it can indeed lead to happiness. To come right to the point to be happy spending money, you can’t spend it on yourself.

But let’s back up and explain how Norton and his colleagues Elizabeth Dunn and Lara Atkin at the University of British Columbia figured this out.

They asked students at the University of British Columbia if they wanted to be in a study. If they said yes they tested their baseline happiness and gave them an envelope with cash in it. Some were instructed to spend the money on themselves by 5pm that day. Others got instructions to spend it on others by 5pm that day. Some got $5, some got $20.

They called the students that night and found that they had spent the money the way they were asked. They also asked what the students had spent the money on and again asked them about their state of happiness.

What did they spend it on? The ‘personal’ spenders spent it on earrings, makeup, and coffee.

“If you give undergraduates $5 it looks like coffee to them,” Norton says, “and they run over to Starbucks and spend it as fast as they can.”

 That held true also for the ‘pro-social’ spenders who bought gifts for friends, gave money to the homeless and bought friends coffee at Starbucks!

Norton and colleagues found that people who spent their money on others got happier and people who spent the money on themselves were unchanged; neither happier nor unhappier. The amount of money also had no bearing on the happiness quotient of those being studied.

Norton and colleagues then replicated the experiment in Uganda. After all, maybe these findings were valid only for relatively affluent Canadian college students.

Although how the money was spent by each group varied by country, that didn’t matter so much to the results as that you spent it one someone else rather than yourself. The results from Canada, in other words, proved to be pretty much universal.

They then piggy-backed on Gallup Polls taking place across the globe, asking people if they had given recently to a cause and, if so, how happy they were as a result. Almost everywhere around the world giving and happiness were positively correlated. In fact, Gallup found only one country were there was no correlation between charitable giving and happiness; the Central African Republic.

Norton also replicated the Canadian study with drug salespeople in Belgium. Some were asked to spend the money on themselves, some on their teammembers. This time they found that the ‘prosocial’ teams sold more stuff than the ‘personal’ spenders. The return on the 15 Euros was 78 Euros. Astonishing!

Then is a sublime twist, they repeated the experiment with dodgeball teams. I kid you not. The teams that spent money on themselves maintained their existing winning percentages, but the teams that spent it on their teammates became dominant in their leagues.

I suspect that part of the reason that cause marketing works is because it can make people happy. Cause marketers therefore, would be smart to personalize how their cause is benefited by a campaign.

Don’t make it about buying a much-needed new van for the food bank. Make it about buying a van so you can improve services to specific people.

Give people a compelling reason to participate in your cause marketing campaign and when they do you might make them happier!