Money prosocial spending on happiness Dunn, Aknin

Money
has become a significant part of human civilization in recent days. Because it
is so important, finding a spending behavior that promotes happiness may help people
reap the greatest emotional reward from their income. Although there is a
number of spending behaviors associated with higher levels of happiness, we are
going to focus on prosocial spending and the possible mechanisms underlying its
effect on happiness.

In
attempt to investigate the effects of prosocial spending on happiness Dunn,
Aknin and Norton (2008) conducted a series of studies. The first research emphasized
on comparing the positive effects of annual income and spending behavior on
happiness. Participants reported their annual income and spending behavior. The
second variable included two categories, personal and prosocial spending. The
results report a similar positive effect on happiness between prosocial
spending and annual income. On the contrary, personal spending showed no
association with happiness.

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These
findings set the ground for a follow-up study investigating the hypothesis that
people who receive an economic bonus, should experience greater happiness if
they spend it on others. To test this hypothesis, Dunn et al. (2008) used a
longitudinal study to examine the happiness levels of sixteen employees before
and after they received an economic windfall from their company. Namely, a
month before receiving the bonus, participants reported their general happiness
and annual income. Six to eight weeks after receiving the windfall,
participants again described their general happiness and then explained what
proportion of the bonus they spent on themselves and on others. Similar to the
hypothesis and the previous study, employees who devoted more of their bonus to
prosocial spending reported higher levels of happiness. Additionally, it is
important to note that the spending behavior influenced the participants’
happiness gains more than the amount of the windfall. The results appear to be
significant, however it is important to consider its limitations. One could
argue that it is difficult to determine whether the outcome resulted from
prosocial spending because the time between receiving the bonus and responding
to the second questionnaire appears to be long enough for other factors to
influence the participants’ happiness.  

Following
the previous results, the researchers decided to conduct an experiment in
attempt to demonstrate the causal impact of prosocial spending.  Forty-six participants reported their
happiness in the morning. Shortly after, they received an envelope containing
either $5 or $20 that they had to spend by 5:00 p.m. that day. Additionally,
the researchers randomly assigned the participants in two groups based on their
spending condition. The first group spent the money on themselves whereas the
second group spent it on someone else. Later that day, participants reported
their happiness again. Just like the previous studies, this one showed strong
evidence in favor of prosocial spending.  

Based
on the premise that prosocial spending increases happiness and people are
happier when they have enjoyable relationships with close friends and family,
Aknin, Sandstrom, Dunn and Norton (2011) investigated the effects of prosocial
spending based on who the money is spent on. The researchers classified social
relationships by the level of intimacy. As stated in their hypothesis,
participants would report higher happiness gains after recalling spending money
on a strong social tie rather than a weak one. To test their theory, Aknin et
al. (2011) asked eighty individuals at the University of British Columbia
campus to take part in a study investigating how people spend money and how it
affects their state of mind. Participants were randomly divided in two groups
based on their spending recall condition. Shortly after, they reported in
detail the last time they had spent approximately twenty dollars on either a
strong or a weak social tie. After completing the task, participants reported
their affect levels. Following that, they provided further information about
the experience including the time it took place. Consistent with the hypothesis,
the results indicate that participants experienced greater levels of happiness
after recalling a purchase made for a strong social tie. The affect remained
the same even after researchers controlled the recency variable. Aknin et al.
(2011) believe that the effect might serve an evolutionary adaptive function,
because sharing resources with strong ties was probably reinforced throughout
the history of our species.

It
is essential to mention the two main limitations of the study. First, because
the survey took place at a university campus, the sample is not representative.
This may have a significant negative impact in the generalization of the
results. Second, the participants reported their happiness levels after
recalling the event, meaning it is likely that they were able to interpret the
experiment’s purpose and changed the behavior to fit the hypothesis.

Premised
on the previous articles, spending money on others promotes happiness and those
gains increase when the purchaser invests money on a strong tie relationship. Using
these findings as foundation, Yamaguchi et al. (2016) introduce the positive
effect of the purchasers’ social relationships as the mediator of this effect. Particularly,
they theorize that the purchasers will be happier only if their spending
behaviors have a positive influence on their social relationships. To test this
hypothesis, the researchers used a sample of 1,523 undergraduates in Japan.
During the first phase of the study, participants took a test of the
five-factor personality traits. This allowed the researchers to statistically
control for any effects of personality traits that could influence the results.
Following that, respondents described their largest purchase during summer
break which helped estimate the participants’ economic background. The last
three phases of the study included questions regarding the respondents’
experiential purchases, luxury purchases and prosocial spending. If the
participants engaged in any of the three spending behaviors, the researchers
followed up with a question to find out if the particular type of purchase had
a positive effect on the respondents’ social relationships. In agreement with
the proposition, the results reveal that prosocial spenders experienced greater
happiness only when their purchases had a positive impact on their social
relationships. According Yamaguchi et al. (2016) although prosocial spending
itself is not sufficient to make the purchasers happier, it benefits social
relationships, which in turn makes the purchasers happier. It is particularly interesting
to note that the results are in line with the previous findings despite the different
culture between the samples. At the other end of the spectrum, it is important
to note that a convenience sample was used for this research paper as well,
thus generalizing the findings should happen with caution.

The
above discussion has highlighted the benefits of prosocial spending as a consumer
behavior for increasing happiness gains. It reviews a range of previous studies,
all of which agree on the positive association between prosocial spending and
happiness gains. The last two studies agree that prosocial spending promotes
happiness when it has a positive effect on social relationships. Additionally,
the results seem to apply to people from different cultures. Because the effect
appears to be universal, one could hypothesize that the effect serves an
evolutionary adaptive function. More research is required in order to gain a
better understanding of the mechanisms underlying the effects of prosocial
behavior on happiness. This field is very important as it investigates
potential ways of translating increased national wealth to increased national
happiness and can serve as a way to improve the subjective well-being of the
population.

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