How to buy happiness: Purchasing experiences or products?

you cant buy happiness bike


“How to buy happiness?” - Laura stared at the lonely flyer on the office notice-board.

Laura was offered one workshop a year as a part of her benefits package and although there were plenty of offerings all year long, she had been too picky or neglectful and now her boss was asking her to attend any workshop soon or lose the money. She had clearly run out of time and the only one available was a happiness workshop. A couple of colleagues passing by teased her just for staring at the happiness flyer. She was squeamish about choosing this corny sounding workshop but she wanted to get away from work. Either this or forfeit the benefit and just stay in the office! She had no money to go on vacation and her relationship was not going great either. Unable to make up her mind, she stood still staring at the noticeboard. She was shaken out of her daze by the beeping sound of a text message. Her enthusiasm was further dampened when she read her colleague’s text message: “Let us know if they suggest a boy-toy or a great cocktail in this “How to buy happiness?” workshop.”  Word spreads fast around this office, Laura thought; but it also helped make up her mind.  At least I get to be away from work and my office colleagues, she thought.


Laura was the last to arrive at the workshop, but settled down quickly.


“How to buy happiness” – we will get there later. First I want us to introduce ourselves.  I’ll go first. I am Jay, I’ll be conducting this workshop and I have been doing for the past 6 years.  I have a Master’s degree in positive psychology from University of P____ and have conducted more than hundred workshops around the country.  I enjoy hiking and swimming”.  They went around the room introducing themselves.  Laura realized that everyone in the room were at the senior manager or higher level.  She wondered why they need to buy happiness; they are all making a lot of money – six figures or more: isn’t that keeping them happy?  Once the introductions were done, Jay asked everyone to go around talking about what has made them happy in the last 7 days.


“I went running with my wife on the lake shore on Wednesday.  This was our first outdoor run after 5 months of grueling winter.  It was fun” said John, the chief operating officer.  “I spent Friday evening with my old buddies chatting about the camping trip we had during college.  The evening turned into night and we left in the wee hours of the morning but it was fantastic” Michael, the Vice president of Technology said.  Maya, the Chief Financial officer shared: “I went hiking in the Adirondacks with my outdoors group.  We hiked 8 miles in 3 hours, it pushed my limits but it was wild.”  “Laura, what about you?,” asked Jay. Laura was lost in her thoughts listening to the others. “Yes, yes, I took my mother for dinner at her favorite restaurant on Thursday.  We actually had a great time” Laura shared.


After the group had gone through their activities, Jay asked, “Did we find anything is common in all these happiness generating activities?”  “Yes, that’s what I was wondering when I heard each one of us speak. Our happy moments were anywhere but here at the work-place” Laura joked.   “That’s good, but what else?”  Jay asked.  Eventually, it became clear that everyone had talked about experiences that they had.  No one talked about their fancy gadgets and gizmos, their big houses, their fancy cars, their possessions… when asked about what made them happy each one had spoken only about their experiences.  Jay summarized, “So, it is fair to say that what you have enjoyed are experiences.


“A jug of wine and a book of poetry, half a loaf of bread to eat, and you and I seated in a deserted spot, then I will have more wealth than a Sultan’s realm…” 

Omar Khayyam


Mall Window 1_BZ


Is that true?  Think back to all the times you have spent trying to get the best gadgets, the best car, a perfect house and none of that has come up for any of you none”.  He had Laura’s attention now, he was talking to her it seems.  All the time belaboring over the right shoes, the perfect dress and all that had amounted to nothing.  Jay then went on to describe studies that noted similar findings among even larger groups of people.  After a thirty minute discussion on this, he concluded: “So, next time you are in the market to buy something, think about the experiences you will have with it.  It will facilitate an experience you will enjoy, go for it.  If not, maybe it’s not worth a second look”.  Bingo! Laura had been trying to choose between upgrading her current TV with the latest 3D TV or a cruise with her family.  The cruise will definitely be a better experience than the TV.  A nice new mirror vs dinner with friends, an extra table lamp vs hiking trip….


Decisions and choices seemed much easier, thought Laura.


Jay explained further: Several scientific studies have explored the issue. In one study, college students were asked to describe the most recent purchase they had made for more than $100. They were then asked to rate their level of happiness with the purchase.  The researchers classified their purchase into two types: an experiential purchase and a material purchase.  They observed that compared to those who made a material purchase, the students who had mentioned an experiential purchase reported increased happiness with their purchase. This group thought that they got better value for their money and that their purchase contributed more to their happiness in life.  Also, fewer experiential buyers believed that their money could have been spent better elsewhere. 


In yet another study among students at San Francisco University, the happiness level derived from experiential purchases was greater than material possession at an average spending of about $70-76 in each category.  Smaller purchases such as dining were equally rewarding compared to bigger purchases such as travel. 


dinner jignesh shah


John, the Chief Operating Officer retorted: But these studies have been done with college students? My life is far removed from that of a college student?


Jay continued: Before we dismiss what college students think and say, it seems like we are all a little bit like these undergraduates. In a nationwide survey, 1,279 Americans were asked to recall an experiential or a material purchase they had made in the past.  When asked, which of these was making them happier years later, substantially more number of people who recalled an experiential purchase reported being happy with their purchase compared to those who recalled a material purchase.  It has been further demonstrated that even when some material possession led to lasting happiness, for eg.   a CD, it did so only when it served the purpose of providing entertaining experiences (rather than possession of “pride” or “complete collection”).  So even these material purchases worked only in these contexts of experiences.


Remember, these findings cut across age groups, gender, education level and even income levels.  Wealthy as well as poor people reported greater happiness with their experiential purchase compared to material purchase.  The results of these studies have been reproduced by other investigators in various cultures and countries.


Laura asked: It appears that the key is choosing experiences rather than material possessions. WHY does this happen?


People shopping in Mall_BZ


Jay replied: Your observation is correct. Experiences generally take place in social settings, with friends and family. It makes us feel more connected to others.  It builds stronger bonds during the experience and also the memories of the experience continue to enhance these bonds.  Such social interactions build a better story for our memories. At a later point in our life when we are narrating these stories, at times when we go down memory lane these experiences are what we recall best; we may even embellish these experiences.  


Studies have shown that people frequently regret buying things that they mistakenly assumed will make them happy.  For e.g. I buy a new TV and it is enjoyable for a week, then it becomes my norm.  Then, after some time I stop deriving happiness from it because the memory of the old TV is lost and all the comparative pleasure from the old TV is gone.  The happiness from the new TV also fades.  Soon, there is comparison to someone else’s TV.  Someone, somewhere always has a better gadget, better gizmo, better TV than I.  Such comparisons leads to unhappiness.  However, experiences are unique.  It is difficult to compare one’s hiking experience to that of someone else.  It is unique and hence rarely fades in terms of the emotions it elicits. 


Maya the Chief Financial officer asked: I am someone who works with numbers. I am having a bit of difficulty in understanding why experiences continue to stay with us? And why are we more satisfied with experiential purchases?


Jay replied: We understand ourselves and others by stories.  A complex series of 7 experiments was designed to explore the reasons behind the increased satisfaction with experiential purchases among people from all walks of life.  The results demonstrated that we tend to associate ourselves closely with our experiential purchases compared to our material possessions.  So, thinking of ourselves as the sun and our various experiences and possessions revolving around like our planets.  In this analogy, experiences are like Mercury, Venus and Earth but material possessions are like Saturn, Uranus and Neptune. Hence, experiential purchases are more likely to be mentioned in our life story than our possessions. We believe that people who understand our experiences know us better. This does make sense, since we would rate that our friends and family (who know much more about our experiences) know us better than our chartered accountant (who know much more about our possessions and worth). 


Experiences and related stories get better with time.  One reminisces about good and bad times very fondly.  Seneca once said “Things that were hard to bear are sweet to remember”.  Who doesn’t remember their college days of financial struggles with fondness? This phenomenon has been well studied.  For eg. A study was designed to understand how people think of their experiences before (in anticipation), during and after an experience.  Typically people felt very excited about the experience weeks in advance.  However, during the experience, (for eg. A cruise) they went through the ebb and  flow of individual events during the experience.  Regardless, as time went on, their memory distorted the events during the experience and brings it more in alignment with their anticipation.  Hence, experiences were mostly remembered as being positive and people were happier and more satisfied with it.  This process of mental reconstruction of memory has been well studies and the positive bias in such reconstruction  in favour of experiences has been well documented.    


John, the Chief Operating Officer, asked: But there must be some aspect of personality that underlies this? Aren’t some people more inclined to gather experiences while some are more inclined towards material goods? I have seen that with many of my colleagues and staff members? Different strokes for different folks – that’s what works in operations?


Jay said: Based on several well conducted studies, experiences do much more than just making us happy (though that by itself is no small task).  In a well conducted investigation, 3,149 adults consisting of students at two American universities and other volunteers filled out well-validated questionnaires designed to assess their experiential vs material purchasing tendency, emotional state, subjective well-being and satisfaction with life.   Based on an in-depth analysis of the data, the authors concluded that respondents with higher experiential purchasing tendency were more extravert, demonstrated openness and empathic concern for others.  They further benefited from having their psychological needs met leading to increased subjective well-being. 


Interestingly, scientists as well as marketers have been interested in the opposite phenomenon.  Materialism and materialistic tendencies have held equal intrigue.  Since 1985, this group has assessed the impact of materialistic tendencies on people’s health.  By way of various published studies over these decades, it has become clear that those who value material possession are less satisfied with life and report less well-being.  For example, in a study published in 1993, students with higher financial aspirations had less self-actualization and vitality.  Such students were noted to have more anxiety and depression. Experts explain this by positing that those with higher financial success aspiration ignore tendencies related to personality growth and well-being. 


Michael, Vice-President of Technology asked: Nowadays I have been reading about various neurological experiments that attempt to find biological basis for such behaviours, including our buying or purchasing behaviours?


Jay: Interestingly, functional MRI studies have demonstrated that extraverts have increased amygdala pleasure response to happy faces compared to introverts (and perhaps therefore likely to have increased experiential purchasing tendencies as reported in the previous studies).  Although such fMRI findings hint at differences in brain structures of materialists, no direct evidence of this exists currently.


We have come to the end of our time for this session. Maybe I can take one last question.


Laura was quick to raise her hand. She was making notes and requested Jay to summarize the session: “Can you tell us in short, HOW do experiences bring us happiness? I want to share this secret with my colleagues… They were teasing me about enrolling for this workshop…”


Jay: Oh, don’t worry about that. I have been teased for conducting this workshop but I persist because it does bring me happiness to share what I have learned.


Remember that spending money on experiences results in happiness during the event.  Creating experiences with others will create stronger bonds with them.  It will build a memory capital that will look great in the rear-view mirror.  It gives us something to talk about and that conversation usually generates more happiness and goodwill. It is little wonder that a vast majority of people tend to fondly recall their valuable experiential purchase much later after the event.


And maybe I can give you a list of experiences that have been found to generate happiness. Although this list is by no means comprehensive: Dinner, hiking, running, bicycling trips, cruises, camping trips, canoeing, kayaking, Road trip across the state/ country, watching movies – and all this with friends, family, colleagues.


And I urge you to find and create your own experiences that create happiness for you and your friends, family and colleagues.


© Jignesh Shah, 2014






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Images courtesy of:

Bike and Happiness Caption – Dennis Dodson

Family Dinner and Two friends playing a board game – Jignesh Shah

Shopping Mall – Bridget Zhang






















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