Will material items bring you more happiness, or should you spend your money on experiences instead? Research shows that maybe we’ve been facing this old dilemma in the wrong way.
Retail therapy may be a cliché, but evidence shows that it also works: spending on consumer goods, home improvements or vacations can buy us happiness. However, before we all rush to max out our credit cards, there are some important caveats to explore.
Jordi Quoidbach and a team of researchers from the US and Canada (Evan Weingarten, Kristen Duke, Wendy Liu, Rebecca W. Hamilton, On Amir, Gil Appel, Moran Cerf, Joseph K. Goodman, Andrea C. Morales, Ed O'Brien and Monic Sun) examined why consumers derive happiness from purchases, and the types of purchases that provide the most pleasure.
The research, published in the Journal of Consumer Psychology, found that while buying experiences such as vacations generally resulted in more happiness than purchases such as clothing, furniture or even houses, it was the combination of the material value and the experiential pleasure derived from the purchase that brought most happiness.
Both the experiential and material value of the purchase have an impact on the amount of happiness
So, while it is true to say that money can buy happiness, rushing out to buy a Rolex won’t necessarily cure a bad case of the blues. Similarly, neither will a day at the local spa cure all life’s ills – although both may provide short-term pleasure.
The issue, say the researchers, is that both the experiential and material value of the purchase have an impact on the amount of happiness it brings – and you can’t judge one without the other.
The experiential advantage
The “experiential advantage” – or the belief that buying experiences brings more happiness then spending on material goods – has been explained by previous researchers as being more central to an individual’s identity. For example, enjoying a celebratory meal in a favorite restaurant, watching a live band after years of being a fan, or visiting a country that’s been dreamed of since childhood.
Conversely, the thrill of purchasing material possessions — a new coat, a dining table or an expensive watch — can dissipate quickly as the ‘new’ item becomes part of the furniture (literally).
But pitting goods against experiences in the pursuit of happiness overlooks the fact that the two can overlap in more ways than one.
A mixed bag
One of the key issues for the researchers to illustrate was that not all experiences and material purchases can be separated in their entirety, and to measure the level of pleasure brought by a wide range of items.
For example, the purchase of a firepit is material, but its purpose — to enjoy outdoor evenings with friends — is experiential. Similarly, buying clothes is an act of material consumption. But the gains the purchaser can make from wearing those clothes — an enhanced sense of confidence, fitting in with a societal group — can be highly experiential. Other purchases can be experiental but out of necessity and therefore bring little or no pleasure.
So, to recognize the nuances of purchases, the researchers created four categories:
- Low experience, low material (insurance, functional software)
- Low experience, high material (jewelry)
- High experience, low material (holidays)
- High experience, high material (a luxury car)
Using two studies, one set of participants recalled happiness from consumption, and the other set anticipated happiness from a given consumption. A wide range of purchases, from clothes to cars and puppies to plane tickets, were examined.
In each study, two models of measurement were used: a bipolar measurement – which forced the participants to rate a product as more material or more experiential; and a unipolar measurement, which tracks the presence of each of these two attributes separately.
In doing so, Quoidbach and co-authors were able to identify the levels of happiness generated by each mix, capture the unique contributions of material and experiential qualities to happiness, and generate a more comprehensive understanding of how spending money makes people happy.
In the first study — recalling happiness from consumption — 598 Amazon workers, broadly half of them male and half female, were asked to recall four recent purchases that increased their happiness. Items included an iPhone, a Disney+ subscription, a car and tickets to a football match, amongst many others.
The participants were then randomly assigned to rate each of their purchases with either a bipolar measure or two unipolar measures.
- In the bipolar model, each participant was asked to rate their happiness with their purchase in relation to its experiential or material value on a scale of one to seven: one = completely experiential, four = equally experiential and material, and seven = completely material.
- In the unipolar model, they were asked to what extent their purchase, again on scales of one to seven, was existential and to what extent it was material.
They were then asked to report how happy they felt when they thought about each purchase, and how much they thought the purchase contributed to overall levels of happiness in their life, from one (not happy) to seven (very happy). They were also asked the price of each purchase.
A trade-off between material and experiential qualities two is not inherent or necessary
The results revealed that when experiential and material qualities are captured separately, both can contribute to retrospective happiness from consumption. A large sample of real purchases revealed many instances of high-material-high-experiential mixed goods that brought maximal happiness to consumers. Also, a significant number of the happiest purchases were material goods (high on material, low on experiential).
The results also revealed a critical caveat: a trade-off between the two is not inherent or necessary. In consumption where consumers fulfilled one intention, they didn’t necessarily sacrifice the other. Put simply, ‘high-high’ products can provide high happiness.
Anticipation of pleasure
In the second study, using the same set of randomly assigned bipolar and unipolar measures used in study one, participants (1,187 Amazon workers, again broadly half male and half female) were asked to rate their anticipated levels of happiness from a set of 370 material and experiential goods and services.
As with study one, the goods that produced the highest inducement of happiness were high-high mixed goods, and high-material, low-experiential goods.
Goods that are highly material and highly experiential at the same time provide the most happiness
High-experiential, low-material purchases such as private dinner events, live music, and hiking trails constituted 32 per cent of these highest-happiness observations. However, almost half (43 per cent) of the purchases which prompted the highest anticipation of happiness were high-material, low-experiential goods such as new pillows or gold jewelry.
Around a quarter of the items that promoted feelings of happiness were high-high mixed goods such as swimming pools and vacation homes. None of the low-low mixes promoted feelings of happiness.
What can we buy to make us happy?
The researchers found consistent support for the theory that material and experiential purchases that are high on both qualities — such as smart watches, hot tubs or paddleboards — often provide the highest levels of happiness. And, while mixed items can provide high levels of happiness, experiential qualities do more strongly predict anticipated happiness.
These results provide a deeper understanding of the “experiential advantage” of happiness and a more nuanced view of consumer theory: material and experiential qualities have positive relationships with happiness, but there is no inherent trade-off between the two.
So, what does this mean for those of us who want to treat ourselves to lift our mood?
For the consumer, the item and the experience are often impossible to separate. Buying ourselves flowers, the latest cellphone or designer sneakers may not improve our lives — but the experience can certainly make us happy.
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