The Psychology of Gift-Giving
Here it is again: holiday gift-giving season – the best win-win of the year for some, and a time to regret having so many relatives for others.
Whatever your gift philosophy, you may be thinking that you would be happier if you could just spend the money on yourself – but according to a three-part study by Elizabeth Dunn, Lara Aknin, and Michael Norton, givers can get more happiness than people who spend the money on themselves.
Liz, Lara and Mike approached the study from the perspective that happiness is less dependent on stable circumstances (income) and more on the day-to-day activities in which a person chooses to engage (gift-giving vs. personal purchases).
To that end, they surveyed a representative sample of 632 Americans on their spending choices and happiness levels and found that while the amount of personal spending (bills included) was unrelated to reported happiness, prosocial spending was associated with significantly higher happiness.
Next, they took a longitudinal approach to the topic: they gave out work bonuses to employees at a company and later checked who was happier – those who spent the money on themselves, or those who put it toward gifts or charity. Again they found that prosocial spending was the only significant predictor of happiness.
But because correlation doesn’t imply causation, they next took one more, experimental, look at the topic. Here, they randomly assigned participants to “you must spend the money on other people” and “spend the money on yourself” conditions — and gave them either $5 or $20 to spend by the day’s end. They then had participants rate their happiness levels both before and just after the experiment.
The results here were once more in favor of prosocial spending: though the amount of money ($5 vs $20) played no significant role on happiness, the type of spending did.
Surprised by the outcome? You’re not the only one: the researchers later asked other participants to predict the results and learned that 63% of them mistakenly thought that personal spending would bring more job than prosocial purchases.
Happy holidays
Dan
The Honest Truth About Dishonesty: How We Lie to Everyone - Especially Ourselves
I finally decided to write a comment on your blog. I just wanted to say good job. I really enjoy reading your posts.
How reliable is this “self reported happiness” indicator? And how subject is it to perceived social expectations?
I think the guilt associated with receiving a gift you do not want should also be considered. Yes, it makes me more happy to give a gift than to buy something for myself…….but, if they do not like my gift it may cause them unhappiness.
When you receive a gift you do not want you feel bad because you know the gift giver had the best intentions. You don’t want to keep the gift but you feel guilty for getting rid of it.
Cool post Dan (and relevant!)…
I do wonder though – would the outcome be the same if the subjects were in dire need of something very basic, on a survival level, such as food or shelter. Would they still be happier if they gave the money away?
Also, would it depend if they are giving it away to someone who is in the same needy situation, or to someone less needy? Also, in either case, it probably makes a difference if they are spending it on their children / family or on strangers…?!
Anyway, I guess there are always variables.
Happy Holidays to you too!
I also wonder if that applies when you only meet your family on the Christmas holiday, because the rest of the year you live on another city, far away.
In this case, there is not that much social “reward” (although there is a “reward” on the specific date).
Off course there is always gifts for local people, but (at least for me) not comparable with the expenses on the family gifts.
Giving can be important for self-esteem as well. When I arrived at a women’s homeless shelter for their holiday open house, a resident handed me a small brightly wrapped gift. “No, thanks, that’s all right,” I said. But the head of the shelter quietly told me, “Yes, do take it. The women take so, so much, too much, they feel. It’s their joy when they can give a present.” Mine was a 3 or 4 recipe cards pulled from a magazine. Indeed, it was the thought that counted.
typo:
personal spending would bring more job than prosocial purchases.
to
personal spending would bring more joy than prosocial purchases.
Great article and glad I found it a few days before Christmas.
Hi,
Interesting thoughts! I believe it’s not possible to make a general
statement on whether money makes people more or less happy.
Money comes with a whole set of new elements that may have
good or bad impact on our happiness, and depending on how
susceptible we are to every one of them, the conclusion will go
one way or the other (i.e. different from person to person). I
recently made an effort to provide a more comprehensive picture
of what these ad- and disadvantages are. I invite you to have a
look at Money and
Happiness and tell me what you think!
Thank you, Nick
Dan and all fans of Predictably Irrational,
I follow Dan’s web page regularly and always find a lot of insightful information.
I wish you merry Christmas and happy new year 2009 (and don’t forget to deliver on your new year resolutions
)
I attach a link which I am sure will be of interest to behavioral economists
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/12/cognitive-biases-in-popular-songs.html
Best regards
David
Proofing please !
“and a time to regret having so many relatives for other”
“Her is their report:”
Again – “Her is their report:”
Question? Does the quality of the proofing impact the reader’s perception of the quality of the material?
Wake up, America!
Note the substitution of the words “pro-social spending” for “giving”.
It’s easy to see where this “pro-social spending” research is headed. Read the last sentence of the referenced three-part study. The authors are promoting policy interventions (taxes?) to promote pro-social spending.
Try this experiment:
Find productive people (people who work at producing something of value). Divide into two groups. Subtract 30% from the paychecks (money worked for, or earned) of one group. Tell them the 30% is for pro-social spending. Let the other group keep their money. Measure happiness of the two groups.
Happiness comes from the freedom to voluntarily give. Note the words “freedom” and “voluntarily”.
Soundgoodism – what we have here is the manipulation of biblical principles. Christ didn’t go around giving money, He gave of Himself: Healing energy, love, kindness a smile from Self through the God consciousness with divine love. Learn the Laws of God, understand the guidance given to you by your Big Brother that walked, talked and laughed with us two thousand years ago. Then you will find real happiness, real freedom and not just earthly feelgoodism. Go within for the temple of God is within YOU. Listen for the gentle knocking from within, meditate, pray and listen to His still small voice. You are a divine creation.
How about running your spell checker and grammar checker? Your writing would be easier to read.
Additional typo Gary missed:
from “people who send the money on themselves”
to “people who spend the money on themselves”
We will try to improve our supervision of Gary’s editing efforts
The study is a special case of giving when the gift is not expected by the recipient.
I suspect that transactional giving (gifts that are expected in exchange for a wedding invitation, exchange at Christmas, eventual reciprocation at birthdays, etc) might produce different results.
Forced “giving” for externally imposed purposes or recipients, such as taxes, is a whole other subject.
To me it is rather obvious why giving is more joyful–because you have the fun of picking something out, thinking about someone you care for, and then the final joyful bump when the person receives the gift and is happily surprised. It’s multiple events, all pleasing, whereas giving something to yourself is generally predictable and has none of the extra fun of the giving part.
I don’t mind taxes for food, shelter, clothing and medical care for those have little or not. Paying my taxes honestly, no matter how steep, makes me feel good and on April 15th it’s the most patriotic thing an
american can do. Paying for nuclear weapons, bombs, and endless wars of choice
saddens me to depression – - all this from a
non-believer!
Good post to keep in mind with today’s charitable giving tax deadline for 2009. We tweeted about this on today’s Daily Twig at http://twitter.com/twigmore
Very interesting reading!
From an anecdotal and personal point of view I can verify and suppot the findings.
Thoughtful gift-giving always requires considerable investment beyond the cost of the gift. Here’s a personal experience at the crossroads of this post, as well as the perennial appeal of “free” (and the consequences of the converse) as articulated in Predictably Irrational!
http://www.brandculture.com/index.php?blog=/blog/2009/12/brand-bah-humbug-scrooge-lives-at-heath-ceramics/
Thanks for your sharing.so wonderful!wish you have a lovely day and Happy New Year.
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just…in the last sentence of the article, do you really mean “job” or “joy.”
Here:
63% of them mistakenly thought that personal spending would bring more job (?) than prosocial purchases.
I just bought your book and now on my way to reading the second chapter..I’m afraid I will be losing sleep tonight and maybe the next few nights to come! (which I can’t afford because I am now in the middle of my overdue thesis). I enjoy it so much. Thank you.
I am surprised by this. Perhaps it is the lack of social spending that causes guilt.
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