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T hink about the things that make you happy. For parents, it must be looking at their toddler after a long day’s work or if you’re in college, it must be finishing your assignments and going out with your friends. There are a lot of ways you can perceive happiness, it’s relative and it is what fits your context. In the book, Psychology of Happiness (2009), author Michael Argyle states “…the very concept of happiness is obscure and mysterious.” People can be happy for a variety of reasons and it’s not something that we can just tell by looking at someone from an outside perspective. In most instances, the belief is that we get happy when we gain something, which could be a new job or a new car, but it mostly has to do with some element of personal gain. So, the concept that when we are losing something that most people want to have more of (money), increases perceived happiness seems out of context. However, in the research done by Dunn et al (2008), they presented how prosocial spending (spending money on others) increases the perceived happiness much more than when you spend money on yourself. There have been various research done supporting the same argument but this paper will try to dive into different aspects of spending money and its relationship with increasing happiness

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Does happiness depend on who you spent the money on?

Let’s compare two situations, you went for a vacation to a place and it happens to be where one of your family relatives lives that you don’t meet very often and know much about, you thought it would be nice to take a gift with you and they were very glad. Now, in a different situation, you bring back a gift from your vacation for your parents, who called you every day and missed you throughout your vacation. In both these cases, there might be a sense of happiness from the reaction you get or just because of your altruistic value. However, the case of bringing a gift back for your parents could be argued to elicit much more happiness than the one you got for your family relative.
In a study conducted by Aknin et al (2011), they focused on what provides greater happiness, prosocial spending on strong ties, or weak ties. They considered strong ties to be close friends and family members while the weak ties were characterized by a relationship with “less frequent contact, lower emotional intensity, and limited intimacy (Aknin et al, 2011).”
Their results were aligned with the hypothesis of the paper that spending money on strong ties will generate more happiness than spending money on weak ties. As explained from the example above, we can see how both the cases can draw happiness for a person but it’s about the difference in the degree of happiness during giving gifts to your parents (strong tie) and family relatives (weak tie).
This doesn’t mean that you should stop spending money on a person that you don’t consider to be a strong tie. Hu et al (2021) in their paper suggest that gift-exchanging can create strong social connectedness between people who are involved in process of gift-giving. This means that there is a good possibility that you can transform a weak tie into a strong social tie, in both cases your perceived happiness increases but as a bond gets stronger your happiness will increase.

Influence of choices in prosocial spending and happiness

Choice has a lot to do with how we perceive our emotions. A sense of autonomy is based on whether we have control over our choices or not. For example, you have been working very hard in your job and you want to upskill by taking a certification that would help you with your work, this is an active choice you make. From the example, your boss sees you working hard and he wants you to take up a certification to upskill yourself which would make it a passive choice.
Moche et al (2021) experimented to find whether choice influences happiness during prosocial spending. They examined differences between three criteria: 1) prosocial and personal spending, 2) Prosocial spending in active and passive choices, and 3) There is a default setting for either prosocial spending or personal spending.
In each case, participants of the study got an amount of money along with a bonus amount. In the control condition, the money could be spent however they wished, in the passive choice condition, the bonus would be donated to a charity, and the active choice participants had a choice to donate to the charity or keep the money. The default conditions had two groups who were either given the default prosocial option where the money would go to charity unless they wished to keep it for themselves or the default prosocial option where the money would be theirs to keep unless they wish to give it away to the charity. Of the two choices, you’re getting upskilled in both, however choosing to do it yourself instead of someone enforcing it would have a greater sense of autonomy.

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The results were aligned with the first hypothesis that people feel much happier when they are involved in prosocial spending compared to personal spending. Secondly, this study wanted to find if there is an influence of active and passive choices on prosocial spending, the results displayed that passive choice had greater perceived happiness compared to active choice. For the third hypothesis of default conditions, it was seen that changing the default especially when people optin to prosocial spending on the charity, yield greater happiness compared to following the default.
The result from the study displays that the condition of choices influences happiness when it comes to prosocial spending. We would commonly believe that active choices would produce more happiness as it’s a decision that we make, but in this study, the active decision would make a person choose between having to keep the money for themselves or donate it. This meant that there would be participants who chose to keep the money, the study did not test the happiness of participants who actively decided to donate or keep the money. However, in a comparison between passive choice (the money would go to the charity) and active choice, the result showed when the money was going to a charity during a passive decision which they had no control over it generated more happiness than actively choosing. This supports the argument that prosocial spending contributes to more happiness, even when you don’t have the control over the decisions.


From the study presented above, it is clear that prosocial spending has a greater positive impact on happiness compared to personal spending. We examined various conditions of prosocial spending, like spending on strong ties and weak ties and the influence of the nature of choices on happiness and prosocial spending. The results of the paper show that no matter what conditions are set, prosocial spending equated to generating happiness on a greater scale.
Study 1
We saw that prosocial spending on a strong tie provided more happiness compared to spending money on a weak tie. However, it is now understood that spending money on both scenarios yielded happiness, and only the degree of happiness changes. Buying gifts (prosocial spending) creates social connectedness and therefore changing a weak tie into a strong tie, producing greater happiness in the long run.
Study 2
When there’s a choice to not participate in prosocial spending (donating), it creates a sense of unhappiness compared to when there’s no choice but to donate, which creates more happiness. Even when there’s no sense of control or autonomy; when it comes to prosocial spending, it generates happiness. We can understand how helpful prosocial spending can be for happiness even in the case where we have no active choice over our decision to do so. This helps us to understand that participating in prosocial spending (buying gifts, donating) can be very helpful to be happy in the social context.

Suprabh Kesav,
Psychology Blogger,
The Shared Secrets Lab,
GiftAFeeling Inc.

Read The Official Research Paper On - The connection between happiness and gift-giving in different condition

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