Tuesday, June 19, 2018

Purchases and Happiness

I've heard it said before that it's better to spend your money on experiences than materials. While I appreciate the sentiment - memories last longer than stuff - something about that statement has always bothered me and I couldn't put my finger on what. But a recent study in Psychological Science, "Experiential or Material Purchases? Social Class Determines Purchase Happiness," helped shed some light on when that sentiment might not be true.

The study is a meta-analysis of past research, as well as a report of 3 additional studies performed by the authors, to determine whether social class determines happiness with experiential versus material purchases. Their hypothesis was that experiences are more valuable to people with higher socioeconomic status - that is, because their material needs have been met, they can focus on higher needs - while materials would be more valuable to people with lower socioeconomic status - people who may struggling with basic needs like food and clothing. They confirmed their hypothesis, not only when examining participants' actual SES, but also when it was experimentally determined, by asking participants to imagine their monthly income had been increased or decreased. As they sum up in the article:
We argue that social class influences purchase happiness because resource abundance focuses people on internal states and goals, such as self-development, self-expression, and the pursuit of uniqueness (Kraus et al., 2012; Stephens et al., 2012; Stephens et al., 2007), whereas resource deprivation orients people toward resource management and spending money wisely (Fernbach et al., 2015; Van Boven & Gilovich, 2003). These fundamentally different value orientations translate into different purchase motives held by people from higher and lower classes (Lee, Priester, Hall, & Wood, 2018).

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