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I want to talk today [br]about money and happiness, [br]

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which are two things that a lot of us [br]spend a lot of our time thinking about.

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Either trying to earn them [br]or trying to increase them.

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And a lot of us resonate with this phrase,

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so we see in religions [br]and self-help books,

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that 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. So that's wrong.[br]

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And in fact, it's not so much [br]that money can't buy happiness.

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(Laughter)[br](Applause)

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It is not so much that [br]money can't buy happiness, [br]

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it's that If you think that, [br]you're just not spending it right.

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

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maybe if you spent it differently [br]that might work a little bit better.

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

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let's think about the way we usually spend it [br]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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People think when they win the lottery, [br]their lives are going to be amazing.

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

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So, what happens [br]when people win the lottery:

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1) They spend all the money and go into debt

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2) All of their friends and everyone they've [br]ever met, find them and bug them for money.

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It ruins their social relationships in fact.

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They have more debt and worse friendships [br]than they had before they won the lottery.

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What was interesting,[br]people started commenting

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on the article, readers of the thing.

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Instead of talking about how it had made them [br]realize money doesn't lead to happiness

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everyone was saying: "You know [br]what I would do if I won the lottery?",

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fantasizing about what they'd do.

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

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One person wrote: "When I win I'm gonna buy [br]my own little mountain

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and have a little house on top".

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(Laughter)

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Another person wrote: "I would fill a bath tub [br]with money and get in the tub

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while smoking a big fat cigar

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and sipping a glass of champagne". [br]This is even worse now.

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"Then I'd have a picture taken [br]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 received a copy of the picture [br]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 and [br]in fact it made them antisocial.

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I told you that it ruins peoples lives [br]and that their friends bug them,

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it also makes us feel very selfish [br]and we do things only for ourselves..

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Maybe the reason why [br]money doesn't make us happy

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is that we're always 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 thought, what would happen

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if we made people spend more money [br]on other people?

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

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what if you're a bit more prosocial [br]with your money

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

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Let's have some people do what they usually do [br]and spend money on themselves

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and let's make some people give money away,

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

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

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we went on a campus [br]at University of British Columbia.

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

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If they said yes, we asked them [br]how happy they were,

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and then we gave them an envelope.

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

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"By 5 p.m. today [br]spend this money on yourself".

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

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Other people in the morning [br]got a slip of paper that said

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by 5 p.m. today to spend [br]this money on somebody else.

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Also, inside the envelope was money.[br]We manipulated how much we gave them.

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So, some people got [br]this slip of paper and 5 dollars.

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Some people got [br]the slip of paper and 20 dollars.

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We let them go about their day.[br]They did whatever they wanted to do.

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

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We called them up at night and asked:

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"What did you spend it on and [br]how happy do you feel now?"

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Well, these are college undergrads,[br]a lot of what they spent it on for themselves

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was things like earrings and make up.[br]Apparently, some of them were women.

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What about for other people? [br]Very different things.

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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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If you give undergraduates 5 dollars, [br]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 a coffee for themselves, [br]the way they usually would

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but other people said that they bought [br]a coffee for somebody else.

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So, it's the very same purchase,

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

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What did we find when we called them back [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 that [br]the amount of money doesn't matter much.

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So, people thought that 20$ [br]would be way better than 5$.

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

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what really matters is that you spend it [br]on somebody else rather than on yourself.

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We see this again and again [br]when we give people money

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to spend on other people [br]instead of on themselves.

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These are undergraduates in Canada - [br]not the world's most representative population.

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They're also fairly wealthy, affluent [br]and all these 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 being in Canada, [br]where we would say to people:

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"Name the last time you spent money[br]on yourself or other people? Describe it,

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how happy did it make you?"

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Or in Uganda: [br]"Name the last time you spent money

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on yourself or other people [br]and describe that".

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Then we ask them how happy they are.

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Again, what we see is amazing [br]because there are human universals

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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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For example, [br]these are some similarities.

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These are two gentlemen [br]from Canada and Uganda.

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Here is one guy from Uganda, [br]who says this.

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We said: "Name a time you spent money [br]on somebody else."

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Men frequently talk about spending [br]money on women, as it turns out.

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He said: "I called a girl [br]I wished to love."

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I think he means romantically love, [br]though it's unclear if he means physical love.

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"We went out on a date...". At the end he says[br]that he didn't achieve her until now.

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Here is a guy from Canada, [br]very similar thing.

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"I took my girlfriend out for dinner. [br]We went to a movie. We left early.

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Then went back to her room [br]for only cake".

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(Laughter)

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Human universal: you're spending money [br]on other people, you're being nice to them.

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Maybe you've something in mind, maybe not.[br]But then we see these similarities

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but also extraordinary differences.

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Look at these two. [br]This is a woman from Canada.

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We say: "Name a time when you spent money [br]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 [br]and gave it to my mom".

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Perfectly nice thing to do. It's good [br]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 long time 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 10000$ it is the local currency. [br]It is a very small amount of money, in fact.

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Enormously different motivations.

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This is real medical need, [br]literally a life-saving 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 is that the specific way [br]that you spend on other people

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isn't nearly as important as the fact [br]that you spend on other people

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in order to make yourself happy,[br]which really quite important.

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You don't have to do amazing things [br]with your money to make yourself happy.

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

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These are only two countries.

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We wanted to go broader [br]and look at every country in the world,

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if we could, to see what the relationship is[br]between money and happiness.

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I'll show you a world map in a second. [br]We got data from the Gallup Organization,

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which you know from the political polls [br]that have been happening lately.

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They ask people: "Did you donate money [br]to charity recently?"

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"How happy are you [br]with your 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?

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Giving money makes you happy?[br]Or, they're negatively correlated?

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

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red means they're negatively correlated.

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You can see the world is crazily green.

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

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people who would give money to charity, [br]are happier than people

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who don't give money to charity.

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

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I'd be a jerk in not telling you what it is. [br]It's Central African Republic.

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You can make up stories,[br]maybe it's different there for some reason.

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Just below that to the right is Rwanda though, [br]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 than keeping it for yourself.

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Across the world [br]we see this in your everyday life

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that this is the impact of spending [br]money on others rather than yourself.

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But this is your own everyday life, [br]and sometimes you personal life.

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What about our work life,[br]where we spend all 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 companies [br]and do a very similar thing.

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These are sales teams in Belgium.[br]They work in teams,

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they go out and sell to doctors [br]and try to get them to buy drugs.

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We can look at how well they sell things [br]as a function of being a member of a team.

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For some teams we give people[br]some money for themselves,

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and say: "Spend it [br]however you want on yourself".

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

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But to other teams we say: [br]"Here's 15 euros.

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Spend it on one of your teammates.

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

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Now we got teams [br]that spend on themselves

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and we have these prosocial teams who we [br]give money to make the team a little better.

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The reason I have a ridiculous pinata there,

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is one of the teams pooled [br]their money and bought a pinata.

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They got together, smashed the pinata [br]and all the candy fell out.

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A very silly and trivial thing to do,

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but think of the difference on the team [br]that didn't do that at all

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that got 15 euro, put it in their pocket, [br]maybe bought themselves a coffee.

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Or teams which had this prosocial experience

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where they all 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 prosocial 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 about it is for every 15 euro [br]you give people for themselves

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

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You don't get any money from that.[br]You actually lose money

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because it doesn't motivate them[br]to perform better.

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But when you give them 15 euro [br]to spend on teammates,

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they do so much better on their team [br]that you get a huge win

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on investing this kind of money.

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You're probably thinking to yourselves [br]"this is all fine, but there is a context,

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that is incredibly important for public policy,[br]and I can't imagine it would work there."

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Basically, "if he doesn't show me that it works here, [br]I don't believe in anything he said."

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What you're all thinking about [br]are dodgeball teams.

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(Laughter)

0:10:00.740,0:10:02.705
This was a huge criticism we got.

0:10:02.705,0:10:05.742
To say "if you can't show [br]a dodgeball team, this is all stupid".

0:10:05.742,0:10:09.947
We went out and found [br]these dodgeball teams and infiltrated them.

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We did the exact same thing as before.

0:10:12.209,0:10:15.061
We give some teams money [br]to spend on themselves.

0:10:15.061,0:10:18.375
Other teams, we give them money to spend [br]on their dodgeball teammates.

0:10:18.375,0:10:20.322
The teams that spend money on themselves,

0:10:20.322,0:10:23.147
were just at the same winning percentages [br]as they were before.

0:10:23.147,0:10:26.376
The teams we give money to spend on each other[br]they become different teams

0:10:26.376,0:10:29.175
and in fact dominate the league [br]by the time they're done.

0:10:29.175,0:10:32.394
Across all these different contexts: [br]your personal life, your work life,

0:10:32.394,0:10:34.692
and even silly things [br]like intramural sports.

0:10:34.692,0:10:37.614
We see that spending on other people[br]has a bigger return for you

0:10:37.614,0:10:39.776
than spending on yourself.

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

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The implication is not you should buy [br]this product instead of that product

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and that's the way to make yourself happier.

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In fact, you should stop thinking [br]of which product to buy for yourself

0:10:52.957,0:10:55.983
and try giving some of it [br]to other people instead.

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We luckily have an opportunity for you [br]to give money away today.

0:10:59.789,0:11:03.907
If you look on the back your name badge, [br]at the very bottom of your badge -

0:11:03.907,0:11:06.809
look now, [br]as I actually want you to do this later,

0:11:06.809,0:11:09.864
you'll see DonorsChoose.org is a non-profit, [br]

0:11:09.879,0:11:12.827
mainly for public school teachers [br]in low-income schools.

0:11:12.827,0:11:16.092
They post projects, like:[br]"I want to teach Huckleberry Finn to my class

0:11:16.092,0:11:17.393
and we don't have the books"

0:11:17.393,0:11:21.045
or "I want a microscope to teach my students [br]science, and we don't have one".

0:11:21.045,0:11:22.907
You and I can go on and buy it for them.

0:11:22.907,0:11:25.625
The teacher writes you a thank you note, [br]the kids write you too,

0:11:25.625,0:11:28.272
sometimes they send you pictures [br]of them using the microscope.

0:11:28.272,0:11:29.789
It is an extraordinary thing.

0:11:29.789,0:11:35.236
That code at the bottom of your name badge [br]is actually a voucher,

0:11:35.236,0:11:38.278
a gift voucher, [br]with free money to donate to charity.

0:11:38.278,0:11:39.896
Go to the website, enter that in.

0:11:39.896,0:11:43.462
I'd encourage you not to just give the money[br]that's on the voucher.

0:11:43.462,0:11:45.414
But actually give some of your own

0:11:45.414,0:11:50.061
and start the process of thinking less [br]about "how can I spend money on myself",

0:11:50.061,0:11:54.318
and more about "if I've got 5 or 15 dollars, [br]what can I do to benefit other people?".

0:11:54.318,0:11:58.033
Because ultimately when you do that,[br]you find out you'll benefit yourself much more.

0:11:58.033,0:11:59.074
Thank you.

0:11:59.074,0:11:59.951
(Applause)