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