According to new research from the McCombs School of Business at The University of Texas at Austin, some purchases are better at sparking happiness than others.
Lead author Amit Kumar, assistant professor of marketing, and his team of researchers revealed that consumers are happier when they spend on experiential purchases rather than material ones. The paper, "Spending on Doing Promotes More Moment-to-Moment Happiness than Spending on Having," is published in the May 2020 issue of the Journal of Experimental Social Psychology.
"One issue that hasn't really been examined much is what happens in the here and now -- are we happier spending our money on an experience or on a material item?" Kumar said. "The basic finding from a lot of experiments is that people derive more happiness from their experiences than from their possessions."
The team recruited 2,635 adults into the study, who were randomly assigned either a material or experiential group. The participants were sent random texts during the day to monitor emotions and purchasing behaviour. The material purchasing group bought things such as jewellery, clothing, and furniture, and the experiential group attended sporting events, dined at restaurants, or engaged in other experiences. The results showed that happiness was higher for participants who engaged in experiential purchases in comparison to the happiness of material puchasers in every category, regardless of the cost of the item.
"It would be unfair to compare a shirt to a trip, but when we account for price, we still see this result where experiences are associated with more happiness," Kumar said.
A second study was then conducted to address potential differences in types of consumers. In the second study, over 5,000 participants were asked to first rate their happiness and then report whether they had used, consumed, or enjoyed either a material or experiential purchase within the past hour. If they responded yes, participants were then asked a series of questions and details regarding their purchase.
"We still observed the same effect," Kumar said. "When the very same person was consuming an experience, that was associated with more happiness."
The team concluded that people are happier with experiential purchases over material ones, whether happiness is measured before, during, or after consumption. Experiential purchases also prompt more satisfaction despite people generally spending more time using material possessions. The researchers believe that a possible explanation is that experiences endure in people’s memories, while the perceived value of material purchases tend to weaken over time.
"If you want to be happier, it might be wise to shift some of your consumption away from material goods and a bit more toward experiences," Kumar said. "That would likely lead to greater well-being."