Thursday, January 31, 2013

Giving Away Money to Feel Wealthy

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Just as expressing gratitude confers benefits, so too does giving to others. New research shows that people all around the world – from Canada to Uganda, from South Africa to India – derive more happiness from spending money on others than they do on themselves.

"For the first time, we show that giving away money or spending it on others confers the ironic psychological benefit of increasing the giver’s sense of wealth,” says Michael Norton of Harvard Business School and co-author with Elizabeth Dunn of the University of British Columbia of the upcoming book Happy Money: The Science of Smarter Spending. In a suite of new, not-yet published, studies, Norton and colleagues showed that charitable giving makes people feel wealthier.

This research follows on other recent work published in Psychological Science by Norton and colleagues that shows that giving time to others – from helping with homework to shoveling a neighbors’ driveway – actually makes people feel that they have more time. "In fact, giving time away alleviates people’s sense of time famine even more than receiving unexpected windfalls of free time.”

That people feel wealthier from spending money on others may explain why poor individuals tend to give away a higher fraction of their income than members of the middle class do. In one study, researchers reported that Americans earning less than $20,000 a year give a higher percentage of their income to charity than others earning up to $300,000 a year.

"Our results suggest when the poor give money away, that very act might mitigate their feelings of poverty,” Norton says. "More broadly than this specific benefit, our investigation contributes to the growing body of research documenting the benefits of prosocial behavior, which include greater happiness, reduced mortality, and better immune function.”


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The above story is extracted from the January 19, 2013 news release by Society forPersonality and Social Psychology

Here's another lecture by Dr Elizabeth Dunn on "Money, Generosity and Happiness"

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