Money can buy happiness, as long as you spend it on someone else, according to recent studies.
The experiments, by Harvard professor Michael Norton and two colleagues, suggest that people who spend money on others experience greater happiness than those who spend money on themselves. The scientists confirmed their hypothesis in three separate studies.
One of their studies has implications for leaders striving for happier employees: The scientists tracked 16 employees before and after they received profit-sharing bonuses, and found that the employees who gave more of the money to others ended up happier than the ones who spent more of it on themselves.
In an interview with Norton, Executive learned that most people aren’t aware of the personal benefits of giving, and companies aren’t doing much to encourage it: “Unfortunately, we don’t know of many companies who encourage their employees to donate their bonuses or allow employees to choose the destination of corporate donations,” he says.
Norton points to a rare exception: During the 2007 holiday season, Google gave each of its AdSense clients a 2.0 gigabyte USB flash drive, and also a $100 gift card for Donors-Choose.org, to be donated to an education program of the recipient’s choice.
—Adapted from “Spending Money on Others Promotes Happiness,” Michael Norton, Elizabeth Dunn and Lara Aknin, Science.