Spending Money on People
This literature review is about three articles in which research is done in spending money on people. The articles will be presented in chronological order, because each next article builds on research of the previous one. The three articles all have one thing in common: they all do research in how spending money on people will make you happier. The three articles all conduct this research in a different way. The first article focuses on just the aspect of spending money on people and if it makes you happier. The second article involves the distinction between spending money on strong ties and weak ties and which will make you happier. The third article involves the distinction between doing experiential purchases, material purchases and prosocial spending. Because the topic that is used in all articles is spending money on people, the research question of this essay will be as follows: In which way should you spend money on people to make yourself happier?
The first article is Spending Money on Others Promotes Happiness in which research is done by Elizabeth W. Dunn, Lara B. Aknin and Michael I. Norton. This article is written in 2008. In this research the hypothesis is that investing money in someone else rather than yourself may have benefits for your own happiness. The researchers asked 632 Americans about their general happiness, annual income, and how much they spend in a month on bills, gifts for themselves, gifts for others, and donations to charity. Prosocial spending turned out to be associated with greater happiness. Income and prosocial spending were independent. Spending money on things for yourself was not related to happiness. The way in which people spend their money could be just as important as how much money people earn. It might also make you happier to spend money on someone else rather than yourself. This study also tested the prediction that people who get some extra money should be happier after receiving the money if they spend it on others rather than themselves. The researchers investigated the happiness of 16 people working at a company before and after they received a bonus. The employees reported their happiness and annual income one month before they received the bonus. 6 to 8 weeks after receiving the bonus, they reported their happiness again and how much money they spend on bills, rent, gifts for themselves, gifts for others, donating for charity and other. Employees who used more of their bonus on prosocial spending appeared to be happier after receiving the bonus. How they would spend the bonus influenced their happiness more than the size of the bonus. In a last study, the researchers let 46 participants rate their happiness in the morning. After that, the participants received an envelope in which was either $5 or $20. The participants were asked to spend this money before 5.00 p.m. that day. The participants were randomly assigned into groups. The ones assigned to the personal spending group had to spend the money on a bill or a gift for themselves and participants assigned to the prosocial spending group needed to spend their money on a gift for someone else or a charity. The participants reported their happiness again after 5:00 p.m. that day. Participants in the prosocial spending group reported greater happiness after receiving the money than participants in the personal spending group did. The results provide support for the causal argument that spending money on other people will make you happier than spending money on yourself. No implications were given.
The second article is Spending Money on Strong Social Ties Leads to Greater Happiness than Spending on Weak Social Ties in which research is done by Lara B. Aknin, Gillian M. Sandstrom, Elizabeth W. Dunn and Michael I. Norton. This article is written in 2011. This study investigates if spending money either on a strong or weak social tie will make you happier. Their hypothesis is that participants are happier after spending money on a strong tie rather than a weak tie. 80 participants were randomly assigned to spending money on a strong tie or on a weak tie. The participants were asked to tell the researchers the last time they had spent twenty dollars on someone who they considered a weak tie or a strong tie. After that, the participants had to report their current affect using 10 positive and 10 negative affect adjectives on a scale from 1 to 5 (Positive and Negative Affect Schedule). They added the adjective ‘‘happy’’ as an extra item on the PANAS, because happiness important to their study. Participants seemed to be happier after spending money on a strong social tie rather than a weak social tie. Participants were more likely to see their family members as a strong social tie and their friends as a weak social tie. How strong the relationship is, turned out to be more important than the relationship type. These data suggest that you are happier when you spend money on people you know well. Future research should consider intimacy instead of relationship type. In this experiment, participants had to recall a previous experience. Further research could ask people to engage in a new spending behavior.
The third article is Experiential purchases and prosocial spending promote happiness by enhancing social relationships in which research is done by Mana Yamaguchia, Ayumi Masuchib, Daisuke Nakanishic, Sayaka Sugad, Naoki Konishia, Ye-Yun Yua and Yohsuke Ohtsubo. This article is written in 2016. They asked undergraduate students about their experiential purchases and prosocial spending in summer break and examined if it would influence their happiness after the break and if these effects would be mediated by social relationships. This study has two hypotheses. They predicted that experiential purchases or prosocial spending in summer break will make the purchases happier if the purchase has a positive influence on a social relationship. They also predicted that social relationships will be more likely to improve using experiential purchases or prosocial spending rather than luxury purchases. 1523 undergraduate students of four universities in Japan participated in this study. They filled in a questionnaire existing of five sections. The first section was a personality test: the New-castle Personality Assessor and they added two items of happiness. In the second section, the participants had to report their largest purchase in summer break. The third to fifth sections contained questions about participants’ experiential purchases, luxury purchases, and prosocial spending. The participants first had to tell if they had engaged in a purchase. If they answered ‘yes’ they were asked if the purchase had a positive effect on a social relationship. The first hypothesis was supported because it turned out that participants who spent money on an experience or on someone else during summer break, they would be happier after summer break if the spending had positively influenced their social relationships. The second hypothesis was also supported because both experiential purchases and prosocial spending had a positive influence on the participants’ social relationships more often than luxury purchases did. Luxury purchases also made the participants happier when there was no positive influence on a social relationship. There are some limitations. First, it could be possible that individual differences can play a role in purchases which were not measured in this study. Further research could ask people about their happiness before the break and after the break. Second, the study did not collect any details of a consumption. Finally, the participants in this study were all undergraduate students which could have been dependent of the money of their parents, so the study cannot be completely generalized.