On Santorini last summer--a purchased experience.

On Santorini last summer--a purchased experience.

Say you have $30 to spare.  What would you prefer to do: spend it on a new shirt or use it to take a date to a movie?  Or say you have not $30 but $3,000.  Would you rather put the money down on a new car or spend it vacationing at a nice resort? Whatever amount you have, would you be more inclined to purchase a material possession or an experience? 

Researchers have looked at which type of choice is more likely to increase happiness.  The conclusion: you get more happiness for your buck if you pick the experience over the possession. 

According to a 2005 review article written by psychologist Leaf Van Boven of the University of Colorado at Boulder, there are several reasons for this.  First of all, people who are highly materialistic turn out not to be very happy.  The more people agree with statements such as “Some of the most important achievements in life include acquiring material possessions” and “Buying things gives me a lot of pleasure,” the less life satisfaction they report.  Materialism is correlated with symptoms such as depression, narcissism, and paranoia.  We already know that it is also correlated with debt!

Van Boven and colleagues also conducted a series of surveys in which they asked respondents to report on their purchases of material goods and of experiences and how happy each purchase made them.  (The authors note that some purchases, e.g. a bicycle, could fit either category; they went by the person’s stated intention in those cases.)   Regardless of age, gender, ethnicity, or marital status, money spent on experiences made people happier on average than money spent on material goods.  The difference between happiness levels resulting from material and from experiential purchases increased as income level increased. 

Van Boven suggests three reasons why experiences may make people happier than material goods.  First, experiences are more likely to be reappraised favorably after the fact.  Thus, the bike trip that at the time left me cold, sore, and bored will be described later as a bracing, fitness-enhancing jaunt down wooded paths.  One way to think of such reappraisals may be that we commonly reevaluate experiences so as to construct a positive narrative of our lives, but don’t have a similar tendency to reconstruct the meaning of material goods.  A new TV just doesn’t make as good a story as a trip to the Smithsonian.

Second, experiences don’t suffer as much from negative comparisons.  My new cell phone can easily pale in comparison to your new cell phone, but it’s much harder to know whether my trip to see fall foliage was better or worse than your trip to see fall foliage. 

Third, experiences are more likely to have social value.  We usually take vacations, go out to eat, or go to the theater with others.  In contrast, wearing new clothes or riding in our new car are more likely to be solitary activities.  This last point seems to contradict the view of economist Thorstein Veblen in The Theory of the Leisure Class, published in 1899.  He coined the term “conspicuous consumption” to refer to the waste of money and/or resources in order to indicate that one has a higher status than others.  To the extent that our purchases are status displays of this sort, both expenditures on experiences and those for material goods are deeply social in character. 

Regardless, the main point is that we will be happier purchasing experiences than things.  Another benefit of experiences is that many of the best ones don’t cost anything at all.   So, go for a walk, have a good conversation, or read a (library) book.  Happy now?