How Money Can Buy Happiness Through Prosocial Spending

Abstract

Assignment six: Annotated bibliography on Money Cannot Buy Happiness Research question: How Does Money Buy Happiness? Aknin, L. B., Barrington-Leigh, C. P., Dunn, E. W., Helliwell, J. F., Burns, J., Biswas-Diener, R., ... & Norton, M. I. (2013). Prosocial spending and well-being: Cross-cultural evidence for a psychological universal. Journal of personality and social psychology, 104(4), 635. Aknin and his fellow authors conducted a research to test the hypothesis on whether money really buys happiness. The article clearly confirms that money can buy happiness if only it is used to help others. The articles arguments are based on the notion that, money can only but happiness if used on others since pre-social spending is fully associated with greater happiness around the world. It is interesting to note that based on survey data from 136 countries that Aknin et al conducted, the findings indicated that pre-social spending has casual impact on happiness across countries that differ greatly in terms of wealth. This article is of relevance to my research as it will offer insights on how money can be used to buy happiness especially if used to help others. This is an article that defines the positive emotional effect that money can have on its user as attributed to the happiness of the receiver of the financial help. First page Abstract This research provides the first support for a possible psychological universal: Human beings around the world derive emotional benefits from using their financial resources to help others (prosocial spending). In Study 1, survey data from 136 countries were examined and showed that prosocial spending is associated with greater happiness around the world, in poor and rich countries alike. To test for causality, in Studies 2a and 2b, we used experimental methodology, demonstrating that recalling a past instance of prosocial spending has a causal impact on happiness across countries that differ greatly in terms of wealth (Canada, Uganda, and India). Finally, in Study 3, participants in Canada and South Africa randomly assigned to buy items for charity reported higher levels of positive affect than participants assigned to buy the same items for themselves, even when this prosocial spending did not provide an opportunity to build or strengthen social ties. Our findings suggest that the reward experienced from helping others may be deeply ingrained in human nature, emerging in diverse cultural and economic contexts. (PsycInfo Database Record (c) 2020 APA, all rights reserved) Aknin, L. B., Norton, M. I., & Dunn, E. W. (2009). From wealth to well-being? Money matters, but less than people think. The Journal of positive psychology, 4(6), 523-527. http://www.uvm.edu/pdodds/files/papers/others/2009/aknin2009a.pdf In their article, Aknin, Norton and Dunn research on the connection between money and the well-being of human. Concerning human satisfaction and happiness, the authors’ hypothesis that money matters but less than people think. Based on the article it is clear that people work tirelessly to earn high assuming that with high incomes, their satisfaction and happiness will remain defined. It is in this process that money defines negative effects on human since they over work themselves for fears of being defined as poor or low income earners. For this reason, one can conclude that money can buy happiness and at the same time buy anger and discomfort to many as they yearn for the happiness associated with being wealthy. It is for such insights that I believe that this article is of great relevance on my topic of research as it will offer both sides of effects that money brings to its users. The article has great facts that clearly define people’s experiences upon having and not having money which defines their emotional satisfaction in both of their experiences. First page Abstract While numerous studies have documented the modest (though reliable) link between household income and well-being, we examined the accuracy of laypeople's intuitions about this relationship by asking people from across the income spectrum to report their own happiness and to predict the happiness of others (Study 1) and themselves (Study 2) at different income levels. Data from two national surveys revealed that while laypeople's predictions were relatively accurate at higher levels of income, they greatly overestimated the impact of income on life satisfaction at lower income levels, expecting low household income to be coupled with very low life satisfaction. Thus, people may work hard to maintain or increase their income in part because they overestimate the hedonic costs of earning low levels of income. Introduction A striking inconsistency surrounds the relationship between money and happiness. Despite the fact that money has been shown to have a small (though reliable) effect on happiness in developed countries (Diener & Biswas-Diener, 2002; Frey & Stutzer, 2000), humans devote much of their time and energy to earning it, seemingly motivated by the belief that money will have a substantial impact on their overall life satisfaction (Ahuvia, 2008). For example, the amount of time the average American spends at work has grown steadily over the past several decades, despite the fact that this occupational investment comes at the cost of family and leisure time (Schor, 1991). What is the source of this apparent contradiction between researchers’ conclusions about the relatively modest link between money and happiness versus laypeople’s everyday choices and behavior? We suggest that laypeople engage in behaviors designed to increase or maintain their wealth because they overestimate the impact that income has on well-being. Berk, K. (2018). Does Money Make Us Happy? The Prospects and Problems of Happiness Research in Economics. The article starts with a confirmation that money indeed makes people happy. However the article further confirms that though many people associate money with anger and stress, if used properly, money serves as a potential happiness and satisfaction engine amongst human beings. How money buys happiness serves as the primary hypothesis that Berks article aims at testing with the finding indicating that money not only buys happiness but enhance relationships amongst wealthy people. It is an interesting article that analysis economists view regarding the connection between money and happiness which allows for a potential discussion resulting to knowledgeable facts about wealth and happiness. However, chapter 3 of this article provides a contrary finding regarding the levels of income and the extent of happiness. Based on Easterlin paradox in chapter 3, people with higher income are happier than low income earner though raising everyone’s income does not result in overall higher levels of happiness concluding that happiness does not depend on ones absolute income. This article is of relevance to my topic of research since it provides clear facts on the extents to which money can and cannot buy happiness. First page Money makes us happy after all. At least that’s the thesis that economists Weimann, Knabe, and Schob defend in Measuring Happiness: The Economics of Well-Being, 1 a highly accessible and engrossing book that brings together and tries to make sense of virtually all findings of happiness research in economics. The first part of the book provides an overview of happiness research to date, in which the Easterlin Paradox takes central stage. In the second part, the authors critically examine the conclusions of said research, especially the Easterlin Paradox, which they challenge and ultimately reject. The result is a popular book that not only brings the reader up to speed on virtually all facets of happiness research in economics, but also makes a convincing case that, contrary to the received view, money does make people happy. After a brief introduction (Chapter 1) and an overview of the economist’s way of thinking and the place of happiness research in traditional (neoclassical) economics (Chapter 2), the authors introduce the point around which the rest of the book pivots: the Easterlin Paradox (Chapter 3). The Easterlin Paradox consists in the surprising finding that people with higher incomes are happier than people with lower incomes, yet raising everyone’s income does not result in overall higher levels of happiness. From this apparent inconsistency, Easterlin and others have drawn the conclusion that happiness does not depend on one’s absolute income. (The fact that people with higher incomes are happier than people with lower incomes is due to the former’s favorable relative position; higher relative incomes, it turns out, do make people happier.) If this is true, then it follows that GDP is not the best way of assessing a country’s average level of life satisfaction, and surveys that use other markers ought to be used to determine what, if not money, makes people happy. In line with this idea, the next two chapters provide an overview of the results of such surveys, including those that study the connection between happiness and Calvo, R., & Cheung, F. (2018). Does money buy immigrant happiness?. Journal of Happiness Studies, 19(6), 1657-1672. https://link.springer.com/article/10.1007/s10[phone]-3 Does Money Buy Immigrants Happiness is an article in the Journal of Happiness Studies that provides answers on the relationship between income and happiness of the international immigrants. This article confirms that money and happiness (in this respect that amount of income an immigrate gets) are positively collated after migration. Such a confirmation implies that wealthy immigrants are happier with their lives as compared to their low income generating immigrants. However the authors claimed that it is un-clear to confirm the extents of happiness that income exposes the immigrants to upon their stay in the new countries. For this reason, the article aims at testing whether the immigrants’ happiness remains revived as attributed to their levels of income in their new countries of residence. The article conclude by citing that the origin of immigrants defined the extent of happiness that money exposed them to thus money cannot be defined as a potential force that buys happiness. The article is of great relevance to my topic of research as it gives clear facts on the relationship between money and happiness giving knowledge on how ones origin serves as the main gear towards an immigrants origin as compared to the simple notion of wealth levels. First Page Abstract The relationship between income and happiness for international immigrants has been relatively unexplored. A handful of cross-sectional studies has shown that income and happiness are positively correlated after migration, and that wealthier immigrants are more satisfied with their post-migration lives than are their less privileged peers. What is unclear is if the link between income and happiness remains positive as immigrants assimilate to life in a new country. This question is the focus of our study. Using longitudinal data from over 10,000 immigrants tracked up to 30 years in the German Socio-Economic Panel Survey, we set out to provide some insight into the long-term relationship between immigrants’ self-reported life satisfaction and the level of their income in its absolute form. Longitudinal analyses revealed that immigrants who experienced increases in income over time reported greater satisfaction with life and that the income-happiness link remained relatively stable over time. The effect of absolute income on immigrants’ happiness was, nevertheless, small. We also observed that country of origin played an important role in the post-migration association between income and happiness. Income was a stronger predictor of the life satisfaction of immigrants from poorer origins than it was for their wealthier counterparts. Dunn, E. W., Gilbert, D. T., & Wilson, T. D. (2011). If money doesn't make you happy, then you probably aren't spending it right. Journal of Consumer Psychology, 21(2), 115–125. https://doi.org/10.1016/j.jcps.2011.02.002 Dunn, Gilbert and Wilson start their article with an argument that portrays the relationship of money and happiness as surprisingly weak. The authors attribute the weakness of money and happiness relationship to individuals’ way of spending the money. For this reason, the authors’ hypothesis that money can and cannot buy happiness based on the spending approaches employed an individual user. The authors note that consumption methods may make the user happy or unhappy regardless of whether the user had little or much money. To this effect the authors design eight principles that can enhance spender chances of attaining happiness from money. Unlike the other article discussed above, this article pays close attention on ways that can change the spender attitude towards money and rather use whatever money one has for the sole purpose of buying satisfaction. Using this article on my research topic proves to be a strong pillar in answering how money can buy happiness regardless of its quantities. First page Abstract The relationship between money and happiness is surprisingly weak, which may stem in part from the way people spend it. Drawing on empirical research, we propose eight principles designed to help consumers get more happiness for their money. Specifically, we suggest that consumers should (1) buy more experiences and fewer material goods; (2) use their money to benefit others rather than themselves; (3) buy many small pleasures rather than fewer large ones; (4) eschew extended warranties and other forms of overpriced insurance; (5) delay consumption; (6) consider how peripheral features of their purchases may affect their day-to-day lives; (7) beware of comparison shopping; and (8) pay close attention to the happiness of others. Geenen, N. Y., Hohelüchter, M., Langholf, V., & Walther, E. (2014). The beneficial effects of prosocial spending on happiness: work hard, make money, and spend it on others?. The Journal of Positive Psychology, 9(3), 204-208. https://www.tandfonline.com/doi/full/10.1080/17[phone].891154 Geenen and others researched on whether happiness is earned through earning a lot or the way one spends the earnings. The authors hypothesized that, how an individual spends money plays a significant role in defining ones happiness as compared to the levels of income one generates. For this reason, the article points out that regardless of an individual’s level of income, spending money on others (pro-social spending) has positive emotional effects on a spender as compared to spending money for personal interest. Impacting others positively through own spending makes a person happier which defines a potential answer as to how money buys happiness. This article is of relevance to my topic of research as it will give me a chance to understand how selfish spenders ends up buying anger using their own money as compared to prosocial spenders who uses the same money to buy their own happiness. First page Abstract Previous research has shown that the way people spend their money is as important to happiness as how much money people earn. Specifically, it has been shown that spending money on others contributes more to an individual’s happiness than spending money on oneself. In the present study, we investigated this effect and examined the role of the money’s origin. Students were randomly assigned either to spend a small amount of money on...