How to buy happiness
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0:00 - 0:03So I want to talk today about money and happiness,
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0:03 - 0:05which are two things
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0:05 - 0:07that a lot of us spend a lot of our time thinking about,
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0:07 - 0:10either trying to earn them or trying to increase them.
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0:10 - 0:12And a lot of us resonate with this phrase.
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0:12 - 0:14So we see it in religions and self-help books,
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0:14 - 0:16that money can't buy happiness.
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0:16 - 0:19And I want to suggest today that, in fact, that's wrong.
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0:19 - 0:21(Laughter)
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0:21 - 0:23I'm at a business school, so that's what we do.
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0:23 - 0:26So that's wrong, and, in fact, if you think that,
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0:26 - 0:28you're actually just not spending it right.
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0:28 - 0:30So that instead of spending it the way you usually spend it,
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0:30 - 0:32maybe if you spent it differently,
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0:32 - 0:34that might work a little bit better.
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0:34 - 0:37And before I tell you the ways that you can spend it that will make you happier,
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0:37 - 0:39let's think about the ways we usually spend it
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0:39 - 0:41that don't, in fact, make us happier.
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0:41 - 0:43We had a little natural experiment.
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0:43 - 0:46So CNN, a little while ago, wrote this interesting article
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0:46 - 0:49on what happens to people when they win the lottery.
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0:49 - 0:52It turns out people think when they win the lottery their lives are going to be amazing.
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0:52 - 0:54This article's about how their lives get ruined.
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0:54 - 0:56So what happens when people win the lottery
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0:56 - 0:59is, number one, they spend all the money and go into debt,
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0:59 - 1:02and number two, all of their friends and everyone they've ever met
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1:02 - 1:04find them and bug them for money.
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1:04 - 1:06And it ruins their social relationships, in fact.
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1:06 - 1:08So they have more debt and worse friendships
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1:08 - 1:10than they had before they won the lottery.
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1:10 - 1:12What was interesting about the article
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1:12 - 1:15was people started commenting on the article, readers of the thing.
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1:15 - 1:17And instead of talking about
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1:17 - 1:19how it had made them realize that money doesn't lead to happiness,
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1:19 - 1:21everyone instantly started saying,
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1:21 - 1:23"You know what I would do if I won the lottery ... ?"
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1:23 - 1:25and fantasizing about what they'd do.
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1:25 - 1:28And here's just two of the ones we saw that are just really interesting to think about.
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1:28 - 1:31One person wrote in, "When I win, I'm going to buy my own little mountain
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1:31 - 1:33and have a little house on top."
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1:33 - 1:35(Laughter)
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1:35 - 1:38And another person wrote, "I would fill a big bathtub with money
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1:38 - 1:40and get in the tub while smoking a big fat cigar
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1:40 - 1:42and sipping a glass of champagne."
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1:42 - 1:44This is even worse now: "Then I'd have a picture taken
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1:44 - 1:46and dozens of glossies made.
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1:46 - 1:48Anyone begging for money or trying to extort from me
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1:48 - 1:51would receive a copy of the picture and nothing else."
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1:51 - 1:54(Laughter)
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1:54 - 1:56And so many of the comments were exactly of this type,
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1:56 - 1:58where people got money
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1:58 - 2:00and, in fact, it made them antisocial.
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2:00 - 2:03So I told you that it ruins people's lives and that their friends bug them.
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2:03 - 2:05It also, money often makes us feel very selfish
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2:05 - 2:07and we do things only for ourselves.
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2:07 - 2:09Well maybe the reason that money doesn't make us happy
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2:09 - 2:11is that we're always spending it on the wrong things,
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2:11 - 2:14and in particular, that we're always spending it on ourselves.
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2:14 - 2:16And we thought, I wonder what would happen
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2:16 - 2:18if we made people spend more of their money on other people.
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2:18 - 2:21So instead of being antisocial with your money,
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2:21 - 2:23what if you were a little more prosocial with your money?
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2:23 - 2:25And we thought, let's make people do it and see what happens.
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2:25 - 2:27So let's have some people do what they usually do
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2:27 - 2:29and spend money on themselves,
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2:29 - 2:31and let's make some people give money away,
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2:31 - 2:34and measure their happiness and see if, in fact, they get happier.
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2:34 - 2:36So the first way that we did this.
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2:36 - 2:38On one Vancouver morning, we went out on the campus
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2:38 - 2:40at University of British Columbia
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2:40 - 2:42and we approached people and said, "Do you want to be in an experiment?"
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2:42 - 2:44They said, "Yes."
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2:44 - 2:47We asked them how happy they were, and then we gave them an envelope.
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2:47 - 2:49And one of the envelopes had things in it that said,
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2:49 - 2:52"By 5:00 pm today, spend this money on yourself."
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2:52 - 2:55So we gave some examples of what you could spend it on.
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2:55 - 2:57Other people, in the morning, got a slip of paper that said,
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2:57 - 3:00"By 5:00 pm today, spend this money on somebody else."
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3:00 - 3:02Also inside the envelope was money.
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3:02 - 3:04And we manipulated how much money we gave them.
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3:04 - 3:07So some people got this slip of paper and five dollars.
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3:07 - 3:10Some people got this slip of paper and 20 dollars.
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3:10 - 3:13We let them go about their day. They did whatever they wanted to do.
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3:13 - 3:16We found out that they did in fact spend it in the way that we asked them to.
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3:16 - 3:18We called them up at night and asked them,
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3:18 - 3:20"What'd you spend it on, and how happy do you feel now?"
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3:20 - 3:22What did they spend it on?
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3:22 - 3:24Well these are college undergrads, so a lot of what they spent it on for themselves
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3:24 - 3:26were things like earrings and makeup.
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3:26 - 3:29One woman said she bought a stuffed animal for her niece.
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3:29 - 3:31People gave money to homeless people.
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3:31 - 3:34Huge effect here of Starbucks.
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3:34 - 3:36(Laughter)
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3:36 - 3:39So if you give undergraduates five dollars, it looks like coffee to them
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3:39 - 3:42and they run over to Starbucks and spend it as fast as they can.
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3:42 - 3:45But some people bought a coffee for themselves, the way they usually would,
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3:45 - 3:47but other people said that they bought a coffee for somebody else.
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3:47 - 3:49So the very same purchase,
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3:49 - 3:51just targeted toward yourself
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3:51 - 3:53or targeted toward somebody else.
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3:53 - 3:55What did we find when we called them back at the end of the day?
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3:55 - 3:57People who spent money on other people got happier.
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3:57 - 3:59People who spent money on themselves, nothing happened.
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3:59 - 4:02It didn't make them less happy, it just didn't do much for them.
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4:02 - 4:05And the other thing we saw is the amount of money doesn't matter that much.
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4:05 - 4:08So people thought that 20 dollars would be way better than five dollars.
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4:08 - 4:11In fact, it doesn't matter how much money you spent.
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4:11 - 4:13What really matters is that you spent it on somebody else
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4:13 - 4:15rather than on yourself.
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4:15 - 4:17We see this again and again
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4:17 - 4:20when we give people money to spend on other people instead of on themselves.
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4:20 - 4:22Of course, these are undergraduates in Canada --
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4:22 - 4:24not the world's most representative population.
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4:24 - 4:27They're also fairly wealthy and affluent and all these other sorts of things.
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4:27 - 4:30We wanted to see if this holds true everywhere in the world
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4:30 - 4:32or just among wealthy countries.
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4:32 - 4:34So we went, in fact, to Uganda and ran a very similar experiment.
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4:34 - 4:36So imagine, instead of just people in Canada,
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4:36 - 4:39we said, "Name the last time you spent money on yourself or other people.
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4:39 - 4:41Describe it. How happy did it make you?"
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4:41 - 4:43Or in Uganda, "Name the last time you spent money
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4:43 - 4:46on yourself or other people and describe that."
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4:46 - 4:48And then we asked them how happy they are again.
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4:48 - 4:50And what we see is sort of amazing
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4:50 - 4:52because there's human universals on what you do with your money
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4:52 - 4:55and then real cultural differences on what you do as well.
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4:55 - 4:57So for example,
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4:57 - 4:59one guy from Uganda says this.
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4:59 - 5:01He said, "I called a girl I wished to love."
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5:01 - 5:03They basically went out on a date,
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5:03 - 5:06and he says at the end that he didn't "achieve" her up till now.
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5:06 - 5:09Here's a guy from Canada.
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5:09 - 5:11Very similar thing.
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5:11 - 5:13"I took my girlfriend out for dinner.
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5:13 - 5:15We went to a movie, we left early,
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5:15 - 5:19and then went back to her room for ... " only cake -- just a piece of cake.
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5:19 - 5:21Human universal -- so you spend money on other people,
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5:21 - 5:23you're being nice to them.
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5:23 - 5:25Maybe you have something in mind, maybe not.
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5:25 - 5:27But then we see extraordinary differences.
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5:27 - 5:29So look at these two.
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5:29 - 5:31This is a woman from Canada.
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5:31 - 5:33We say, "Name a time you spent money on somebody else."
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5:33 - 5:35She says, "I bought a present for my mom.
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5:35 - 5:37I drove to the mall in my car, bought a present, gave it to my mom."
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5:37 - 5:39Perfectly nice thing to do.
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5:39 - 5:41It's good to get gifts for people that you know.
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5:41 - 5:43Compare that to this woman from Uganda.
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5:43 - 5:45"I was walking and met a long-time friend
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5:45 - 5:47whose son was sick with malaria.
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5:47 - 5:50They had no money, they went to a clinic and I gave her this money."
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5:50 - 5:53This isn't $10,000, it's the local currency.
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5:53 - 5:55So it's a very small amount of money, in fact.
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5:55 - 5:57But enormously different motivations here.
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5:57 - 5:59This is a real medical need,
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5:59 - 6:01literally a life-saving donation.
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6:01 - 6:03Above, it's just kind of, I bought a gift for my mother.
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6:03 - 6:05What we see again though
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6:05 - 6:07is that the specific way that you spend on other people
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6:07 - 6:09isn't nearly as important
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6:09 - 6:11as the fact that you spend on other people
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6:11 - 6:13in order to make yourself happy,
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6:13 - 6:15which is really quite important.
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6:15 - 6:18So you don't have to do amazing things with your money to make yourself happy.
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6:18 - 6:21You can do small, trivial things and yet still get these benefits from doing this.
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6:21 - 6:23These are only two countries.
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6:23 - 6:26We also wanted to go even broader and look at every country in the world if we could
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6:26 - 6:29to see what the relationship is between money and happiness.
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6:29 - 6:31We got data from the Gallup Organization,
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6:31 - 6:34which you know from all the political polls that have been happening lately.
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6:34 - 6:36They ask people, "Did you donate money to charity recently?"
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6:36 - 6:39and they ask them, "How happy are you with your life in general?"
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6:39 - 6:41And we can see what the relationship is between those two things.
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6:41 - 6:44Are they positively correlated? Giving money makes you happy.
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6:44 - 6:46Or are they negatively correlated?
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6:46 - 6:48On this map, green will mean they're positively correlated
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6:48 - 6:51and red means they're negatively correlated.
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6:51 - 6:53And you can see, the world is crazily green.
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6:53 - 6:55So in almost every country in the world
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6:55 - 6:57where we have this data,
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6:57 - 6:59people who give money to charity are happier people
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6:59 - 7:01that people who don't give money to charity.
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7:01 - 7:04I know you're all looking at that red country in the middle.
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7:04 - 7:06I would be a jerk and not tell you what it is,
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7:06 - 7:08but in fact, it's Central African Republic.
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7:08 - 7:10You can make up stories. Maybe it's different there for some reason or another.
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7:10 - 7:12Just below that to the right is Rwanda though,
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7:12 - 7:14which is amazingly green.
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7:14 - 7:16So almost everywhere we look
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7:16 - 7:18we see that giving money away makes you happier
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7:18 - 7:20than keeping it for yourself.
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7:20 - 7:23What about your work life, which is where we spend all the rest of our time
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7:23 - 7:25when we're not with the people we know.
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7:25 - 7:28We decided to infiltrate some companies and do a very similar thing.
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7:28 - 7:30So these are sales teams in Belgium.
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7:30 - 7:32They work in teams; they go out and sell to doctors
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7:32 - 7:34and try to get them to buy drugs.
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7:34 - 7:37So we can look and see how well they sell things
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7:37 - 7:39as a function of being a member of a team.
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7:39 - 7:41Some teams, we give people on the team some money for themselves
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7:41 - 7:43and say, "Spend it however you want on yourself,"
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7:43 - 7:45just like we did with the undergrads in Canada.
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7:45 - 7:47But other teams we say, "Here's 15 euro.
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7:47 - 7:49Spend it on one of your teammates this week.
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7:49 - 7:52Buy them something as a gift or a present and give it to them.
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7:52 - 7:55And then we can see, well now we've got teams that spend on themselves
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7:55 - 7:57and we've got these prosocial teams
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7:57 - 7:59who we give money to make the team a little bit better.
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7:59 - 8:01The reason I have a ridiculous pinata there
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8:01 - 8:03is one of the teams pooled their money and bought a pinata,
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8:03 - 8:06and they all got around and smashed the pinata and all the candy fell out and things like that.
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8:06 - 8:08A very silly, trivial thing to do,
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8:08 - 8:11but think of the difference on a team that didn't do that at all,
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8:11 - 8:13that got 15 euro, put it in their pocket,
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8:13 - 8:15maybe bought themselves a coffee,
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8:15 - 8:17or teams that had this prosocial experience
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8:17 - 8:20where they all bonded together to buy something and do a group activity.
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8:20 - 8:23What we see is that, in fact, the teams that are prosocial sell more stuff
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8:23 - 8:25than the teams that only got money for themselves.
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8:25 - 8:27And one way to think about it
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8:27 - 8:29is for every 15 euro you give people for themselves,
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8:29 - 8:32they put it in their pocket, they don't do anything different than they did before.
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8:32 - 8:34You don't get any money from that.
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8:34 - 8:37You actually lose money because it doesn't motivate them to perform any better.
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8:37 - 8:39But when you give them 15 euro to spend on their teammates,
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8:39 - 8:41they do so much better on their teams
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8:41 - 8:44that you actually get a huge win on investing this kind of money.
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8:44 - 8:46And I realize that you're probably thinking to yourselves,
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8:46 - 8:48this is all fine,
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8:48 - 8:50but there's a context that's incredibly important for public policy
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8:50 - 8:52and I can't imagine it would work there.
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8:52 - 8:54And basically that if he doesn't show me that it works here,
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8:54 - 8:56I don't believe anything he said.
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8:56 - 8:59And I know what you're all thinking about are dodgeball teams.
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8:59 - 9:01(Laughter)
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9:01 - 9:03This was a huge criticism that we got
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9:03 - 9:06to say, if you can't show it with dodgeball teams, this is all stupid.
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9:06 - 9:08So we went out and found these dodgeball teams
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9:08 - 9:10and infiltrated them.
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9:10 - 9:12And we did the exact same thing as before.
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9:12 - 9:15So some teams, we give people on the team money, they spend it on themselves.
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9:15 - 9:17Other teams, we give them money
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9:17 - 9:19to spend on their dodgeball teammates.
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9:19 - 9:21The teams that spend money on themselves
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9:21 - 9:23are just the same winning percentages as they were before.
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9:23 - 9:25The teams that we give the money to spend on each other,
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9:25 - 9:27they become different teams
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9:27 - 9:29and, in fact, they dominate the league by the time they're done.
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9:29 - 9:31Across all of these different contexts --
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9:31 - 9:33your personal life, you work life,
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9:33 - 9:35even silly things like intramural sports --
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9:35 - 9:37we see spending on other people has a bigger return for you
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9:37 - 9:40than spending on yourself.
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9:40 - 9:42And so I'll just say, I think if you think money can't buy happiness
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9:42 - 9:44you're not spending it right.
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9:44 - 9:47The implication is not you should buy this product instead of that product
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9:47 - 9:49and that's the way to make yourself happier.
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9:49 - 9:51It's in fact, that you should stop thinking
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9:51 - 9:53about which product to buy for yourself
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9:53 - 9:56and try giving some of it to other people instead.
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9:56 - 9:59And we luckily have an opportunity for you.
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9:59 - 10:01DonorsChoose.org is a non-profit
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10:01 - 10:04for mainly public school teachers in low-income schools.
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10:04 - 10:06They post projects,
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10:06 - 10:08so they say, "I want to teach Huckleberry Finn to my class and we don't have the books,"
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10:08 - 10:10or "I want a microscope to teach my students science
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10:10 - 10:12and we don't have a microscope."
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10:12 - 10:14You and I can go on and buy it for them.
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10:14 - 10:17The teacher writes you a thank you note. The kids write you a thank you note.
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10:17 - 10:19Sometimes they send you pictures of them using the microscope.
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10:19 - 10:21It's an extraordinary thing.
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10:21 - 10:23Go to the website and start yourself on the process
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10:23 - 10:26of thinking, again, less about "How can I spend money on myself?"
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10:26 - 10:29and more about "If I've got five dollars or 15 dollars,
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10:29 - 10:31what can I do to benefit other people?"
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10:31 - 10:34Because ultimately when you do that, you'll find that you'll benefit yourself much more.
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10:34 - 10:36Thank you.
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10:36 - 10:38(Applause)
- Title:
- How to buy happiness
- Speaker:
- Michael Norton
- Description:
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At TEDxCambridge, Michael Norton shares fascinating research on how money can, indeed buy happiness -- when you don't spend it on yourself. Listen for surprising data on the many ways pro-social spending can benefit you, your work, and (of course) other people.
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 10:58
Brian Greene edited English subtitles for How to buy happiness | ||
Krystian Aparta commented on English subtitles for How to buy happiness | ||
Krystian Aparta edited English subtitles for How to buy happiness | ||
Krystian Aparta edited English subtitles for How to buy happiness | ||
Arthur edited English subtitles for How to buy happiness | ||
Jana Porsche edited English subtitles for How to buy happiness | ||
Greta Ivanova edited English subtitles for How to buy happiness | ||
marisol gold accepted English subtitles for How to buy happiness |
Krystian Aparta
The English transcript was updated on 3/1/2017.