WEBVTT

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I want to talk today
about money and happiness,

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which are two things that 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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so we see it in religions
and self-help books,

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that 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. So that's wrong.

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

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(Laughter)
(Applause)

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

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

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So that 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 that 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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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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People think when they win the lottery,
their lives are going to be amazing.

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This article is about
how their lives get ruined.

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So, what happens
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 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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They have more debt and worse friendships
than they had before they won the lottery.

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What was interesting,
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 realize

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money doesn't lead to happiness,

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everyone was saying: "You know
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,
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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Another person wrote:

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"I would fill a bath tub
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".
This is even worse now.

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"Then I'd have a picture taken
and dozens of glossies made.

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Anyone begging for money
or trying to extort from me

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would received 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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I told you that it ruins people's lives
and that their friends bug them,

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

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Maybe the reason why
money doesn't make us happy

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is that we're always 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 thought, what would happen

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if we made people spend more money
on other people?

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So, instead of being antisocial
with your money

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

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and 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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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
and see if in fact they get happier.

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

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we went on a campus
at University of British Columbia.

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

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If they said yes, we asked them
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
that said:

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

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

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

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

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

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

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Some people got
the slip of paper and 20 dollars.

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

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We found out that they did spend it
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 how happy do you feel now?"

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

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

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What about for other people?
Very different things.

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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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If you give undergraduates 5 dollars,
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
a coffee for themselves,

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the way they usually would,

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

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So, the very same purchase,

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just targeted towards yourself
or towards somebody else.

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

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

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

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

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We see this again and again
when we give people money

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to spend on other people
instead of on themselves.

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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, affluent
and all these 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 being in Canada,
where we would say to people:

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"Name the last time you spent money
on yourself or other people?

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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

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on yourself or other people
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
because there are human universals

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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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For example,
these are some similarities.

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These are two gentlemen
from Canada and Uganda.

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Here is one guy from Uganda,
who says this.

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

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

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

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I think he means romantically love,
though it's unclear

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if he means physical love.

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"We went out on a date...".

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At the end he says
that he didn't achieve her until now.

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Here is a guy from Canada,
very similar thing.

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

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Then went back to her room
for only cake".

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(Laughter)

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Human universal: you spend money
on other people,

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you're being nice to them.

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Maybe you've something in mind,
maybe not.

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But then we see these similarities,

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but also extraordinary differences.

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Look at these two.
This is a woman from Canada.

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We say: "Name a time when 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
and gave it to my mom".

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

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Enormously different motivations.

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

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

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in order to make yourself happy,
which is really quite important.

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

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You can do small trivial things
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 and 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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I'll show you a world map in a second.
We got data from the Gallup Organization,

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

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

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"How happy are you
with your 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?

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

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On this map, 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,
where we have this data,

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people who would give money to charity,
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
at that red country in the middle.

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I'd be a jerk and not tell you what it is.
It's Central African Republic.

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

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Just below that to the right
is Rwanda which is amazingly green.

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So, almost everywhere we look,
we see that giving money away

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makes you happier
than keeping it for yourself.

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Across the world
we see this in your everyday life

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

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

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What about our work life,
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
and do a very similar thing.

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These are sales teams in Belgium.
They work in teams,

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

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

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For some teams we give people
some money for themselves,

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

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Just like we did
with the undergrads in Canada.

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But to other teams we say:
"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
and give it to them.

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Now we got teams
that spend on themselves

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and we have these prosocial teams
who we give money

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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
their money and bought a pinata.

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They got together, smashed the pinata
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
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 which had this
prosocial experience

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

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What we see is that the teams
that are prosocial sell more stuff

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than the teams that only got
money for themselves.

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One way to think about it
is for every 15 euro

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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 any money from that.
You actually lose money

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because it doesn't motivate them
to perform better.

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

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they do so much better on their teams
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,
"This is all fine, but there is a context,

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that is incredibly important
for public policy,

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and I can't imagine it would work there."

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Basically, "If he doesn't show me
that it works here,

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I don't believe in anything he said."

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What you're all thinking about
are dodgeball teams.

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(Laughter)

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This was a huge criticism we got.

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To say "If you can't show
a dodgeball team, this is all stupid".

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We went out and found these
dodgeball teams and infiltrated them.

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We did the exact same thing as before.

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We give 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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were just at the same winning percentages
as they were before.

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The teams we give money to spend
on each other, they become different teams

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and in fact dominate the league
by the time they're done.

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Across all these different contexts:
your personal life, your work life,

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and even silly things
like intramural sports.

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We see that 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 is not 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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In fact, you should stop thinking
of which product to buy for yourself

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and try giving some of it
to other people instead.

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

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If you look on the back your name badge,
at the very bottom of your badge -

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look now, as I actually
want you to do this later,

00:11:06.809 --> 00:11:09.864
you'll see DonorsChoose.org
is a non-profit,

00:11:09.879 --> 00:11:12.827
mainly for public school teachers
in low-income schools.

00:11:12.827 --> 00:11:16.092
They post projects, like: "I want to teach
Huckleberry Finn to my class

00:11:16.092 --> 00:11:17.393
and we don't have the books"

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

00:11:19.231 --> 00:11:21.069
and we don't have one".

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

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The teacher writes you a thank you note,
the kids write you too,

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sometimes they send you pictures
of them using the microscope.

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It is an extraordinary thing.

00:11:29.789 --> 00:11:35.236
That code at the bottom of your name badge
is actually a voucher,

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a gift voucher,
with free money to donate to charity.

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Go to the website, enter that in.

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I'd encourage you not to just give
the money that's on the voucher.

00:11:43.462 --> 00:11:45.414
But actually give some of your own

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and start the process of thinking less
about "how can I spend money on myself",

00:11:50.061 --> 00:11:52.718
and more about,
"If I've got 5 or 15 dollars,

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what can I do to benefit other people?"

00:11:55.135 --> 00:11:56.438
Because ultimately when you do that,

00:11:56.438 --> 00:11:57.841
you find out you'll benefit yourself
much more.

00:11:57.841 --> 00:11:59.074
Thank you.

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(Applause)