Contrary to popular belief, money can buy happiness if spent correctly, according to Harvard Business School professor Michael I. Norton, who spoke to a packed auditorium in Boylston Hall Tuesday evening.
“We’re asking people to think broadly,” Norton said. “‘What am I doing with my money and should I be doing something else with it?’”
Norton co-authored the book “Happy Money: The Science of Smarter Spending” with Elizabeth W. Dunn ’99, a professor at the University of British Columbia. In their book, the pair researched how alternate ways of spending money can actually increase an individual’s level of happiness.
Specifically, they considered how the act of giving money can increase contentment.
“There are other things that are important to happiness that go beyond just focusing on ourselves the whole time,” Norton said.“You get more happiness out of giving than out of getting.”
During the lecture, Norton shared with the audience an experiment he conducted in Vancouver, Canada with Dunn in 2006 to test the correlation between spending and happiness.
The researchers conducted the experiment with two groups of students, according to Norton. Norton said each group received the same amount of money, but the individuals in one group had to spend money on themselves, while the individuals in the other group were told to spend the money on other people.
Norton said the research team then asked the students to report on their level of happiness after spending money, and, according to Norton, the results were conclusive.
“We saw that people who spent money on themselves were not unhappy—it’s not bad to spend money on yourself—but it doesn’t do that much for you, whereas spending money on someone else tends to make people happier,” Norton said.
The team conducted similar experiments in 136 countries.
Norton said that spending money on other people decreases stress levels by inhibiting the release of the hormone cortisol. These results hold particular significance for college students, Norton said.
“It seems today that when we give people advice about how to spend their money, they often feel overwhelmed that they’ll have to make enormous changes about how they live their lives,” Norton said. “But you don’t have to give a million dollars to charity to get happy.”
During the lecture, Norton discussed making research more accessible to the public. Norton said the target audience for his book was the “average smart person,” and he tailored his language toward this demographic.
Attendees at the event said Norton’s research was in fact not difficult to comprehend.
“Mike Norton understands the importance of explaining academic research in an engaging way,” Carmen D. Nobel, a senior editor for the HBS Working Knowledge forum, said.
Extension School student Katherine Scott agreed with Nobel and said she found the research practical and informative.
“Psychology and happiness sometimes seem like immeasurable things,” Scott said. “I loved hearing the research behind it and how they figured this stuff out.”
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