Blog #61 – Experience versus stuff
You might recall that earlier in this series we looked at the issue of money and happiness. More specifically, we attempted to answer the often asked question: Can money make you happy or happier? The answer, as is so often the case with psychology, was and remains best summed up thusly: It depends. So, not so much yes or no as yes and no, with this kind of answer helping to explain why psychology can be so maddening for those of us who like to imagine that straight answers should be possible when asking seemingly simple questions. However, the typical psychologist response to such a point might be that the question (as is the case with so many others) may seem simple, but becomes increasingly complex the more you delve into it.
Psychology and straight answers (or the lack thereof) is perhaps a topic in its own right, but the notion of questions in this discipline seeming simple but revealing layers of complexity upon closer inspection is rarely more applicable than when considering the relationship between money and happiness.
As we highlighted when last we focused on this topic, some research speaks of a ‘tipping point’, whereby when you have very little money, getting a pay increase or a better paid job or otherwise improving your financial situation can have a positive and measurable impact on happiness, but once you reach a certain level of financial stability, whereby you don’t need to worry about paying the bills and can be nice to yourself every now and then, from that point onwards the relationship tends to flatten out, i.e., more money seems to make little or no difference to individual happiness. However, where evidence suggests it can make a difference is in terms of life evaluation. In clear terms, if we accumulate more money, above and beyond the point of removing financial worries, while that will tend to make little or no impact on us at an emotional level, it can continue to yield dividends at the cognitive level. So, there can be a discernible difference in terms of how money impacts us on level of how we think versus how we feel.
Another angle we looked at was how the choices we make in spending money can impact individual happiness. Here, we emphasised research which shows that, yes, money can ‘buy’ happiness to an extent, but primarily when people consciously choose to spend on experiences, as opposed to merely accumulating ‘stuff’.
Recently published research has added to our understanding of this latter point, highlighting that even the experiences versus stuff debate is more nuanced that had been widely assumed. This is another example of a question that defies simple answers, and so, when we ask which spending strategy is likely to offer more happiness-related spin-offs, we are again forced to respond with “It depends”.
In a paper published in Psychological Science, Jacob C. Lee, Deborah L. Hall, and Wendy Wood looked at the role that social class plays when attempting to answer the question of whether people should buy experiences or material goods when looking to make themselves happy.
In setting the stage for their work, the authors acknowledge that the prevailing wisdom on this question has been that buying experiences will do more for happiness than purchasing material goods, with this perspective also seeming to have penetrated the wider consciousness. However, they stress that the social class angle has been relatively underexplored.
So, with a view towards investigating whether financial resources influence the answer to the overall question, Lee, Hall, and Wood undertook a series of experiments, each looking to examine the issue from a different angle.
In the first, 209 United States-based adults were asked to recall experiential and material purchases they had made with an eye on making themselves happier, and then to indicate which had proven more successful, using a seven-point scale, from -3 (definitely experiential) to +3 (definitely object). Participants also completed the MacArthur Scale of Subjective Social Status, which allowed researchers to assign them to higher or lower social class. Analysing this data, the authors found that higher social class participants were more likely to report greater happiness associated with an experiential purchase, while lower class participants tended to favour the material purchase.
In the second, 500 participants were randomly assigned to reflect upon either an experiential or a material purchase made in the past and then asked to answer the question: “When you think about this purchase, how happy does it make you?” Here, again, higher class participants exhibited the so-called experiential advantage, whereas lower class participants reported similar levels of happiness arising from experiential or material purchases.
The third experiment sought to influence individual mind-sets, with a view towards testing whether hypothetical abundance or scarcity of disposable income would influence the outcome. Here, 402 participants were first asked to recall a discretionary purchase of each type, with both having cost approximately the same amount of money. Then, they were randomly assigned to one of two conditions – they were asked to imagine that either their monthly income had increased by 50% or decreased by the same percentage. They then wrote for three minutes on how they would budget with the new level of income, and were asked to imagine that they had lived with that adjusted financial situation for six months. At that point, they were asked the same question as posed in the first experiment, considering either the purchases they imagined in the first instance or new purchases they might now make. The authors reported that participants in the resource-abundance condition exhibited an experiential advantage, while those in the resource-deprivation condition were more likely to show a material advantage, but not to the point of statistical significance.
Summing up their overall findings, the authors wrote: “Across studies, we found that higher-class participants with abundant resources were made happier from purchasing experiences than material goods. However, lower-class participants with limited resources did not benefit more from experiential purchases. They were happier from material purchases in Study 1, which involved a direct comparison between purchase types. In the remaining studies, they were equally happy from both purchases.”
So, those with greater levels of disposable income (and those asked to imagine they had) were always more likely to report greater happiness from seeking to buy experiences as opposed to material things, whereas those with less disposable income either derived greater pleasure from the material stuff or reported similar levels of happiness from both types of transaction.
What possible explanations might account for these differences and to what extent should we be cautious about these findings? We will examine both of those points next time.
Dr. Mark Barry
Mark Barry was awarded a PhD by University College Cork in 2015 for his research into adolescent well-being. He has lectured psychology at UCC since 2013 and is also a freelance writer.