0:00:01.722,0:00:04.135
So I want to talk today[br]about money and happiness,

0:00:04.159,0:00:07.717
which are two things a lot of us[br]spend a lot of our time thinking about,

0:00:07.741,0:00:10.571
either trying to earn them[br]or trying to increase them.

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And a lot of us resonate with this phrase,

0:00:12.898,0:00:15.707
we see it in religions[br]and self-help books:

0:00:15.731,0:00:17.026
money can't buy happiness.

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And I want to suggest today[br]that, in fact, that's wrong.

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(Laughter)

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I'm at a business school,[br]so that's what we do.

0:00:24.165,0:00:25.318
So that's wrong,

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and in fact, if you think that,[br]you're just not spending it right.

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So instead of spending it[br]the way you usually spend it,

0:00:31.261,0:00:34.748
maybe if you spent it differently,[br]that might work a little bit better.

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Before I tell you the ways you can spend[br]it that will make you happier,

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let's think about the ways[br]we usually spend it

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that don't, in fact, make us happier.

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We had a little natural experiment.

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So CNN, a little while ago,[br]wrote this interesting article

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on what happens to people[br]when they win the lottery.

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It turns out people think[br]when they win the lottery

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their lives will be amazing.

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This article's about[br]how their lives get ruined.

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What happens when people win the lottery

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is, one, they spend[br]all the money and go into debt;

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and two, all of their friends[br]and everyone they've ever met

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find them and bug them for money.

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It ruins their social[br]relationships, in fact.

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So they have more debt[br]and worse friendships

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than they had before they won the lottery.

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What was interesting[br]about the article was,

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people started commenting[br]on the article, readers of the thing.

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And instead of talking[br]about how it made them realize

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that money doesn't lead to happiness,

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everyone started saying, "You know[br]what I'd do if I won the lottery ...?"

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and fantasizing about what they'd do.

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Here's just two of the ones we saw[br]that are interesting to think about.

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One person wrote, "When I win,[br]I'm going to buy my own little mountain

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and have a little house on top."

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(Laughter)

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And another person wrote,[br]"I would fill a big bathtub with money

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and get in the tub[br]while smoking a big fat cigar

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and sipping a glass of champagne."

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This is even worse:[br]"... then I'd have a picture taken

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and dozens of glossies made.

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Anyone begging for money[br]or trying to extort from me

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would receive a copy[br]of the picture and nothing else."

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(Laughter)

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And so many of the comments[br]were exactly of this type,

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where people got money[br]and, in fact, it made them antisocial.

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So I told you it ruins people's lives[br]and their friends bug them.

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Also, money often makes[br]us feel very selfish

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and we do things only for ourselves.

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We thought maybe the reason money[br]doesn't make us happy

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is that we're spending it[br]on the wrong things;

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in particular, we're always[br]spending it on ourselves.

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And we wondered what would happen

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if we made people spend[br]more of their money on others.

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So instead of being antisocial[br]with your money,

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what if you were more pro-social with it?

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We thought, let's make people[br]do it and see what happens.

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Let's have some people[br]do what they usually do,

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spend money on themselves,

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and let's make some people[br]give money away,

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and measure their happiness[br]and see if, in fact, they get happier.

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The first way we did this was,[br]one Vancouver morning,

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we went out on the campus[br]at University of British Columbia,

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approached people and said,[br]"Do you want to be in an experiment?"

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They said, "Yes."

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We asked them how happy they were,[br]and then gave them an envelope.

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One of the envelopes[br]had things in it that said,

0:02:50.343,0:02:53.338
"By 5pm today,[br]spend this money on yourself."

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We gave some examples[br]of what you could spend it on.

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Other people got[br]a slip of paper that said,

0:02:58.048,0:03:01.163
"By 5pm today, spend this money[br]on somebody else."

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Also inside the envelope was money.

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And we manipulated[br]how much money we gave them;

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some people got this slip[br]of paper and five dollars,

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some got this slip[br]of paper and 20 dollars.

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We let them go about their day[br]and do whatever they wanted.

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We found out they did spend it[br]in the way we asked them to.

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We called them up and asked them,[br]"What did you spend it on?

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How happy do you feel now?"

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What did they spend it on?

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These are college undergrads;

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a lot of what they spent it on[br]for themselves

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were things like earrings and makeup.

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One woman said she bought[br]a stuffed animal for her niece.

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People gave money to homeless people.

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Huge effect here of Starbucks.

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(Laughter)

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So if you give[br]undergraduates five dollars,

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it looks like coffee to them,

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and they run over to Starbucks[br]and spend it as fast as they can.

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Some people bought coffee for themselves,[br]the way they usually would,

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but others bought coffee[br]for somebody else.

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So the very same purchase,

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just targeted toward yourself[br]or targeted toward somebody else.

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What did we find when we called[br]at the end of the day?

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People who spent money[br]on others got happier;

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people who spent it on themselves,[br]nothing happened.

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It didn't make them less happy,[br]it just didn't do much for them.

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The other thing we saw is the amount[br]of money doesn't matter much.

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People thought 20 dollars[br]would be way better than five.

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In fact, it doesn't matter[br]how much money you spent.

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What really matters[br]is that you spent it on somebody else

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rather than on yourself.

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We see this again and again

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when we give people money to spend[br]on others instead of on themselves.

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Of course, these are[br]undergraduates in Canada --

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not the world's most[br]representative population.

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They're also fairly wealthy and affluent[br]and other sorts of things.

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We wanted to see if this holds true[br]everywhere in the world

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or just among wealthy countries.

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So we went to Uganda[br]and ran a very similar experiment.

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Imagine, instead of just people[br]in Canada, we say,

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"Name the last time you spent[br]money on yourself or others.

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Describe it. How happy did it make you?"

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Or in Uganda, "Name the last time[br]you spent money on yourself or others

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and describe that."

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Then we asked them[br]how happy they are, again.

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And what we see is sort of amazing,

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because there's human universals[br]on what you do with your money,

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and real cultural differences[br]on what you do as well.

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So for example, one guy[br]from Uganda says this:

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"I called a girl I wished to love."

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They basically went out on a date,

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and he says at the end[br]that he didn't "achieve" her up till now.

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(Laughter)

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Here's a guy from Canada.

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Very similar thing.

0:05:11.790,0:05:13.781
"I took my girlfriend out for dinner.

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We went to a movie, we left early,

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and then went back to her room[br]for ... cake," just cake.

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(Laughter)

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Human universal:

0:05:22.048,0:05:24.284
you spend money on others,[br]you're being nice.

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Maybe you have something[br]in mind, maybe not.

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But then we see extraordinary differences.

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So look at these two.

0:05:29.650,0:05:31.004
This is a woman from Canada.

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We say, "Name a time you spent[br]money on somebody else."

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She says, "I bought a present for my mom.

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I drove to the mall, bought[br]a present, gave it to my mom."

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Perfectly nice thing to do.

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It's good to get gifts[br]for people you know.

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Compare that to this woman from Uganda:

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"I was walking and met a longtime friend[br]whose son was sick with malaria.

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They had no money, they went to a clinic[br]and I gave her this money."

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This isn't $10,000,[br]it's the local currency.

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So it's a very small[br]amount of money, in fact.

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But enormously different motivations here.

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This is a real medical need,[br]literally a lifesaving donation.

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Above, it's just kind of,[br]I bought a gift for my mother.

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What we see again, though,

0:06:05.798,0:06:09.448
is that the specific way you spend[br]on other people isn't nearly as important

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as the fact that you spend on other people[br]in order to make yourself happy,

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which is really quite important.

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So you don't have to do[br]amazing things with your money

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to make yourself happy.

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You can do small, trivial things and still[br]get the benefits from doing this.

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These are only two countries.

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We wanted to look at every country[br]in the world if we could,

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to see what the relationship is[br]between money and happiness.

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We got data from the Gallup Organization,

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which you know from[br]all the political polls happening lately.

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They asked people, "Did you donate[br]money to charity recently?"

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and, "How happy are you[br]with life in general?"

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We can see what the relationship is[br]between those two things.

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Are they positively correlated,[br]giving money makes you happy?

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Or are they negatively correlated?

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On this map, green will mean[br]they're positively correlated,

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red means they're negatively correlated.

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And you can see,[br]the world is crazily green.

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So in almost every country in the world[br]where we have this data,

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people who give money[br]to charity are happier people

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than people who don't give[br]money to charity.

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I know you're looking[br]at the red country in the middle.

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I would be a jerk and not[br]tell you what it is,

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but it's Central African Republic.

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You can make up stories.

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Maybe it's different there[br]for some reason.

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Just below that to the right[br]is Rwanda, though,

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which is amazingly green.

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So almost everywhere we look,

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we see that giving money away[br]makes you happier

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than keeping it for yourself.

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What about work, which is where[br]we spend the rest of our time,

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when we're not with the people we know.

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We decided to infiltrate some companies[br]and do a very similar thing.

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These are sales teams in Belgium.

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They work in teams,[br]go out and sell to doctors

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and try to get them to buy drugs.

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We can look and see[br]how well they sell things

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as a function of being a member of a team.

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We give people on some teams some money

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"Spend it however you want on yourself,"

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just like we did[br]with the undergrads in Canada.

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To other teams we say, "Here's 15 euro.[br]Spend it on one of your teammates.

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Buy them something as a gift[br]and give it to them.

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Then we can see, we've got teams[br]that spend on themselves

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and these pro-social teams[br]who we give money to make the team better.

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The reason I have[br]a ridiculous pinata there

0:08:01.600,0:08:04.015
is one team pooled their money[br]and bought a pinata,

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they smashed the pinata,[br]the candy fell out and things like that.

0:08:07.144,0:08:08.584
A silly, trivial thing to do,

0:08:08.608,0:08:11.913
but think of the difference on a team[br]that didn't do that at all,

0:08:11.937,0:08:15.511
that got 15 euro, put it in their pocket,[br]maybe bought themselves a coffee,

0:08:15.535,0:08:17.595
or teams that had[br]this pro-social experience

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where they bonded together[br]to buy something and do a group activity.

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What we see is that the teams[br]that are pro-social sell more stuff

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than the teams that only got[br]money for themselves.

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One way to think of it is: for every[br]15 euro you give people for themselves,

0:08:30.113,0:08:33.521
they put it in their pocket and don't do[br]anything different than before.

0:08:33.545,0:08:34.986
You don't get money from that;

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you lose money, since it doesn't[br]motivate them to perform better.

0:08:38.113,0:08:40.915
But when you give them 15 euro[br]to spend on their teammates,

0:08:40.939,0:08:42.713
they do so much better on their teams

0:08:42.737,0:08:45.831
that you actually get a huge win[br]on investing this kind of money.

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You're probably thinking[br]to yourselves, this is all fine,

0:08:48.561,0:08:51.764
but there's a context that's incredibly[br]important for public policy,

0:08:51.788,0:08:53.702
and I can't imagine it would work there.

0:08:53.726,0:08:55.833
And if he doesn't show me[br]that it works here,

0:08:55.857,0:08:57.471
I don't believe anything he said.

0:08:57.495,0:09:00.282
I know what you're all thinking[br]about are dodgeball teams.

0:09:00.306,0:09:01.697
(Laughter)

0:09:01.721,0:09:03.576
This was a huge criticism that we got,

0:09:03.600,0:09:06.781
that if you can't show it[br]with dodgeball teams, this is all stupid.

0:09:06.805,0:09:10.988
So we went and found these dodgeball[br]teams and infiltrated them,

0:09:11.012,0:09:12.890
and did the exact same thing as before.

0:09:12.914,0:09:15.834
So we give people on some teams[br]money to spend on themselves.

0:09:15.858,0:09:19.576
Other teams, we give them money[br]to spend on their dodgeball teammates.

0:09:19.600,0:09:21.576
The teams that spend money on themselves

0:09:21.600,0:09:23.786
have the same winning[br]percentages as before.

0:09:23.810,0:09:26.229
The teams we give the money[br]to spend on each other

0:09:26.253,0:09:27.408
become different teams;

0:09:27.432,0:09:29.983
they dominate the league[br]by the time they're done.

0:09:30.007,0:09:32.016
Across all of these different contexts --

0:09:32.040,0:09:35.648
your personal life, you work life,[br]even things like intramural sports --

0:09:35.672,0:09:38.482
we see spending on other people[br]has a bigger return for you

0:09:38.506,0:09:40.480
than spending on yourself.

0:09:40.504,0:09:44.305
So if you think money can't buy happiness,[br]you're not spending it right.

0:09:44.329,0:09:47.909
The implication isn't you should buy[br]this product instead of that product,

0:09:47.933,0:09:50.063
and that's the way[br]to make yourself happier.

0:09:50.087,0:09:53.722
It's that you should stop thinking[br]about which product to buy for yourself,

0:09:53.746,0:09:56.576
and try giving some of it[br]to other people instead.

0:09:56.600,0:09:59.104
And we luckily have[br]an opportunity for you.

0:09:59.128,0:10:03.198
DonorsChoose.org is a nonprofit[br]for mainly public school teachers

0:10:03.222,0:10:04.655
in low-income schools.

0:10:04.679,0:10:05.972
They post projects like,

0:10:05.996,0:10:09.016
"I want to teach Huckleberry Finn[br]and we don't have the books,"

0:10:09.040,0:10:11.526
or, "I want a microscope[br]to teach my students science

0:10:11.550,0:10:13.079
and we don't have a microscope."

0:10:13.103,0:10:15.054
You and I can go on and buy it for them.

0:10:15.078,0:10:17.553
The teacher and the kids[br]write you thank-you notes,

0:10:17.577,0:10:20.390
sometimes they send pictures[br]of them using the microscope.

0:10:20.414,0:10:21.760
It's an extraordinary thing.

0:10:21.784,0:10:24.900
Go to the website and start yourself[br]on the process of thinking

0:10:24.924,0:10:27.028
less about "How can I spend[br]money on myself?"

0:10:27.052,0:10:29.909
and more about "If I've got[br]five dollars or 15 dollars,

0:10:29.933,0:10:32.078
what can I do to benefit other people?"

0:10:32.102,0:10:35.588
Ultimately, when you do that, you'll find[br]you benefit yourself much more.

0:10:35.612,0:10:36.803
Thank you.

0:10:36.827,0:10:38.230
(Applause)