To do or to have? That is the question
‘Men fancy that external goods are the cause of happiness [but] leisure of itself gives pleasure and happiness and enjoyment in life.’-Aristotle
If you won a lottery of a million rupees and had nothing essential to spend it on what would you do? Would you buy a large screen TV, an expensive dress or saree or would you spend it on a grand holiday? Which option would give you the bigger dose of happiness in the long term?
This is the question that two psychologists Thomas Gilovich and Leaf Van Boven set out to answer when they embarked on an experiment in 2003.The original experiment was simple. Van Boven and Gilovich asked college students to reflect on either a recent experiential purchase or a material purchase such as a TV or car. An experiential purchase was defined as “spending money with the primary intention of acquiring life experiences”, such as a vacation. The students were specifically asked to describe either the most recent experiential or material purchase they had made for more than $100 and to rate how happy they were with their purchases. They were also asked to evaluate the wisdom of their purchase from an economic standpoint.
What would be the likely answer? In the humanistic tradition, love of material goods is disparaged. Jesus in the New Testament is quoted as saying, “Indeed, it is easier for a camel to pass through an eye of a needle than for a rich man to enter the kingdom of God.” But material purchases are physically retained over time whereas a vacation will remain only as a memory or a pleasant feeling.
What did they find? The group asked to evaluate an experiential purchase indicated it made them happier than did those asked to evaluate a material purchase. They also indicated that experiential purchases were better financial investments than material purchases.
Why is this so? To understand this better let us look at another study by psychologists Daniel Kahneman, a Nobel Prize winner, Nobert Schwarz and Jing Xu. They asked motorists how much pleasure they get from their car on a scale of 0 to 10. As expected the more luxurious the car the more pleasure it gave its owner. A BMW 7 generated 50 percent more pleasure than a Ford Escort. Then they asked a different question: How happy were you during your last car trip? They compared the answers with the value of the car driven. This time there was no correlation. No matter how luxurious or utilitarian the car owners’ ratings were equally low.
How can this be? The question makes you think about the car while the second question makes you think about the journey with all its attendant frustrations of traffic jams and inconsiderate drivers. A car makes you happy while you think about it but not when you drive it. This is an example of the focusing illusion, our feelings depend on what we attend to. That is one reason why experiential purchases give more lasting happiness than material ones. After all, the purpose of an experiential purchase is to have an experience.
Another reason is adaptation. Ever bought something expensive and felt great about it? I am sure you have. But six months down the line do you feel the same? Probably not. We get bored with things easily, especially with possessions that we have less emotional attachment to.This is the hedonic treadmill, also known as hedonic adaptation, the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes. Experiences are more resistant to hedonic adaptation than material things.
Here are some other reasons why experiences are more value for money in terms of increasing your happiness compared to goods.
You are much less likely to be envious of your neighbours or friends’ vacation than of his brand-new luxury car. Envy is created more through comparisons about material than with experiences. We are more likely to be fascinated rather than jealous of a travel experience. It is hard to quantify the relative value of any two experiences as compared to material goods and therefore jealousy and envy becomes less of an issue.
Who we are or our identity is the sum total of our experiences not the sum total of our possessions. Buying a new dress or the latest gadget is exciting for a while, but does not fundamentally change who we are but an exciting travel or social experience will enrich you and repeated such experiences will shape your personality.
People are more likely to be interested in your social life or travel tales rather than in your material possessions. If you persistently talk about what you own you are likely to bore your audience whereas fascinating tales of your work and life will arouse interest and engage people leading to enrichment of your social life.
Finally, experiences last longer than material things. You may find this hard to believe but it is a misconception that a physical object lasts longer than a one-off experience such as a party, vacation or concert. Our experiences stay with us for years or even a lifetime. Unlike material goods, the experiences are in our mind and available for savouring anytime. Gilovich has shown in other experiments that anticipation is an important bonus when it comes to experiences. We feel excited and happy the moment we start planning a vacation or an outing with friends and when it happens it stays in our memories forever. The anticipation of buying also stirs our emotions but Gilovich found that this is more a not so pleasant experience.
Which brings me back to the question I asked at the beginning of this article: Spend your money on the holiday, it will bring you more happiness in the long run. The ancient philosopher Aristotle was right after all.
A Happy Christmas and a Happy New Year to all my readers. May the experience of this year give you lasting happiness!