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So I want to talk today
about money and happiness,

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which are two things a lot of us
spend a lot of our time thinking about,

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either trying to earn them
or trying to increase them.

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And a lot of us resonate with this phrase,

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we see it in religions
and self-help books:

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money can't buy happiness.

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

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(Laughter)

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

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So that's wrong,

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

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So instead of spending it
the way you usually spend it,

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maybe if you spent it differently,
that might work a little bit better.

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

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let's think about the ways
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,
wrote this interesting article

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on what happens to people
when they win the lottery.

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It turns out people think
when they win the lottery

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their lives will be amazing.

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This article's about
how their lives get ruined.

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What happens when people win the lottery

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

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and two, all of their friends
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
relationships, in fact.

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So they have more debt
and worse friendships

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than they had before they won the lottery.

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What was interesting
about the article was,

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people started commenting
on the article, readers of the thing.

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And instead of talking
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
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
that are interesting to think about.

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One person wrote, "When I win,
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,
"I would fill a big bathtub with money

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and get in the tub
while smoking a big fat cigar

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and sipping a glass of champagne."

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

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and dozens of glossies made.

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Anyone begging for money
or trying to extort from me

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

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(Laughter)

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And so many of the comments
were exactly of this type,

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

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

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Also, money often makes
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
doesn't make us happy

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

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

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And we wondered what would happen

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

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So instead of being antisocial
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
do it and see what happens.

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Let's have some people
do what they usually do,

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spend money on themselves,

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and let's make some people
give money away,

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

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The first way we did this was,
one Vancouver morning,

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

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approached people and said,
"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,
and then gave them an envelope.

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One of the envelopes
had things in it that said,

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"By 5pm today,
spend this money on yourself."

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

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Other people got
a slip of paper that said,

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"By 5pm today, spend this money
on somebody else."

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Also inside the envelope was money.

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And we manipulated
how much money we gave them;

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some people got this slip
of paper and five dollars,

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some got this slip
of paper and 20 dollars.

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

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

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We called them up and asked them,
"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
for themselves

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were things like earrings and makeup.

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One woman said she bought
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
undergraduates five dollars,

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it looks like coffee to them,

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

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

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but others bought coffee
for somebody else.

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So the very same purchase,

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just targeted toward yourself
or targeted toward somebody else.

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

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People who spent money
on others got happier;

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people who spent it on themselves,
nothing happened.

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

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

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People thought 20 dollars
would be way better than five.

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

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What really matters
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
on others instead of on themselves.

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Of course, these are
undergraduates in Canada --

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not the world's most
representative population.

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

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

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or just among wealthy countries.

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

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Imagine, instead of just people
in Canada, we say,

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"Name the last time you spent
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
you spent money on yourself or others

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and describe that."

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Then we asked them
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
on what you do with your money,

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and real cultural differences
on what you do as well.

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So for example, one guy
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
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.

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"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
for ... cake," just cake.

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(Laughter)

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Human universal:

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you spend money on others,
you're being nice.

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Maybe you have something
in mind, maybe not.

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But then we see extraordinary differences.

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So look at these two.

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This is a woman from Canada.

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We say, "Name a time you spent
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
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
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
whose son was sick with malaria.

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

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

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

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But enormously different motivations here.

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This is a real medical need,
literally a lifesaving donation.

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

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What we see again, though,

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is that the specific way you spend
on other people isn't nearly as important

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as the fact that you spend on other people
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
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
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
in the world if we could,

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to see what the relationship is
between money and happiness.

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We got data from the Gallup Organization,

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which you know from
all the political polls happening lately.

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

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

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

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Are they positively correlated,
giving money makes you happy?

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Or are they negatively correlated?

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

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red means they're negatively correlated.

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And you can see,
the world is crazily green.

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

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people who give money
to charity are happier people

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than people who don't give
money to charity.

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

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I would be a jerk and not
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
for some reason.

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Just below that to the right
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
makes you happier

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than keeping it for yourself.

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What about work, which is where
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
and do a very similar thing.

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These are sales teams in Belgium.

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They work in teams,
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
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
with the undergrads in Canada.

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

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Buy them something as a gift
and give it to them.

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

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

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The reason I have
a ridiculous pinata there

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is one team pooled their money
and bought a pinata,

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

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A silly, trivial thing to do,

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but think of the difference on a team
that didn't do that at all,

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that got 15 euro, put it in their pocket,
maybe bought themselves a coffee,

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or teams that had
this pro-social experience

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

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

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than the teams that only got
money for themselves.

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

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they put it in their pocket and don't do
anything different than before.

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You don't get money from that;

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

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But when you give them 15 euro
to spend on their teammates,

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they do so much better on their teams

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that you actually get a huge win
on investing this kind of money.

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

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but there's a context that's incredibly
important for public policy,

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and I can't imagine it would work there.

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And if he doesn't show me
that it works here,

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I don't believe anything he said.

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I know what you're all thinking
about are dodgeball teams.

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(Laughter)

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This was a huge criticism that we got,

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that if you can't show it
with dodgeball teams, this is all stupid.

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So we went and found these dodgeball
teams and infiltrated them,

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and did the exact same thing as before.

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So we give people on some teams
money to spend on themselves.

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Other teams, we give them money
to spend on their dodgeball teammates.

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The teams that spend money on themselves

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have the same winning
percentages as before.

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The teams we give the money
to spend on each other

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become different teams;

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they dominate the league
by the time they're done.

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Across all of these different contexts --

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your personal life, you work life,
even things like intramural sports --

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we see spending on other people
has a bigger return for you

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than spending on yourself.

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So if you think money can't buy happiness,
you're not spending it right.

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The implication isn't you should buy
this product instead of that product,

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and that's the way
to make yourself happier.

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It's that you should stop thinking
about which product to buy for yourself,

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and try giving some of it
to other people instead.

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And we luckily have
an opportunity for you.

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DonorsChoose.org is a nonprofit
for mainly public school teachers

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in low-income schools.

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They post projects like,

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"I want to teach Huckleberry Finn
and we don't have the books,"

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or, "I want a microscope
to teach my students science

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and we don't have a microscope."

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You and I can go on and buy it for them.

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The teacher and the kids
write you thank-you notes,

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sometimes they send pictures
of them using the microscope.

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It's an extraordinary thing.

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Go to the website and start yourself
on the process of thinking

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less about "How can I spend
money on myself?"

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and more about "If I've got
five dollars or 15 dollars,

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what can I do to benefit other people?"

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Ultimately, when you do that, you'll find
you benefit yourself much more.

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Thank you.

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(Applause)