Can money buy you happiness? Yes—so long as you spend the money on someone else. According to new research, giving other people even as little as $5 can lead to increased well-being for the giver.
That's the insight into the secret of happiness by HBS professor Michael Norton and two colleagues from the University of British Columbia, Elizabeth Dunn and Lara Aknin. Their article, "Spending Money on Others Promotes Happiness," appeared in the March 21, 2008 issue of Science.
"Intentional activities—practices in which people actively and effortfully choose to engage—may represent a promising route to lasting happiness. Supporting this premise, our work demonstrates that how people choose to spend their money is at least as important as how much money they make," the researchers explain.
"Our findings suggest that very minor alterations in spending allocations—as little as $5 in our final study—may be sufficient to produce non-trivial gains in happiness on a given day."
Norton and colleagues found these results to hold in three different studies: a nationally representative survey, a field study of windfall spending, and an exploration in which participants were randomly assigned to spend money on others rather than themselves.