Alright. Well, I’m here to start off the morn­ing by talk­ing about mon­ey and hap­pi­ness, and what sci­ence can tell us about how we might use the for­mer to get the lat­ter. In par­tic­u­lar, I want to sug­gest that mon­ey can both aid and impede the pur­suit of happiness.

Now, I first became inter­est­ed in this issue a few years back when I myself sud­den­ly came into a lot of mon­ey. When I say that I came into a lot of mon­ey what I mean is that I went from being a grad­u­ate stu­dent to being a fac­ul­ty mem­ber. So, I real­ize that most junior fac­ul­ty aren’t con­sid­ered wealthy. But we aca­d­e­mics have one great advan­tage, which is that we make so lit­tle mon­ey as grad­u­ate stu­dents that sud­den­ly hav­ing an actu­al salary feels like being instant­ly wealthy.

So this brings us to our first les­son about mon­ey and hap­pi­ness. We human beings are sen­si­tive to change. So we like it when mon­ey falls from the sky, when we sud­den­ly expe­ri­ence an increase in income. But like Dan Ariely’s frog, we adapt with remark­able speed to our new­found wealth. In fact, once peo­ple are mak­ing about seventy-five thou­sand dol­lars a year, addi­tion­al income ceas­es to have any real impact on peo­ple’s day-to-day happiness.

Now, this is a puz­zle. After all, much of eco­nom­ics and pub­lic pol­i­cy rests on the assump­tion that increas­ing the wealth of indi­vid­u­als and nations pro­vides a route to increas­ing their well­be­ing. So why does mon­ey fail us?

Well, we stum­bled across a nov­el answer to this ques­tion quite by acci­dent. In look­ing at a data set that my stu­dent had col­lect­ed for com­plete­ly dif­fer­ent rea­sons, we hap­pened to notice that the more mon­ey peo­ple had the less they report­ed savor­ing the lit­tle plea­sures of dai­ly life. So fol­low­ing up on this bit of serendip­i­ty, we con­duct­ed a larg­er study and exact­ly the same thing popped out.

So for exam­ple we asked peo­ple to imag­ine com­ing across a beau­ti­ful water­fall while on a hike. The more mon­ey peo­ple had, the less like­ly they were to say they would jump in and hoot with joy, or even to stand back and pause to real­ly appre­ci­ate the beau­ty of this moment. Now, this is impor­tant because the abil­i­ty to real­ly savor life’s plea­sures is impor­tant for hap­pi­ness. So this helps to explain why it is that the rela­tion­ship between mon­ey and hap­pi­ness is rel­a­tive­ly weak. At the same time that mon­ey does all kinds of great things for us, it also seems to get in the way of our hap­pi­ness by imped­ing our abil­i­ty to savor. So the idea here is that if you have a lot of mon­ey or even just kind of think about mon­ey, you feel like you can get what­ev­er you want. So you don’t real­ly need to savor every lit­tle morsel of plea­sure that comes your way.

So can we real­ly blame mon­ey? Is this mon­ey’s fault? Does wealth actu­al­ly cause us to savor less? Well, to find out we would love to make the peo­ple instant­ly wealthy, maybe here in the audi­ence today, see what hap­pens. Unfortunately we can’t do that. But, psy­chol­o­gists have devel­oped ways to make peo­ple tem­porar­i­ly feel and behave as though they them­selves are wealthy. In fact, all it takes is show­ing peo­ple a pho­to­graph of a big stack of money. 

Now, the rea­son why this works is that we all have pow­er­ful net­works of men­tal asso­ci­a­tions with the con­cepts of mon­ey and wealth. So it’s pret­ty easy for us psy­chol­o­gists to tap into these net­works, switch them on, and see what hap­pens. So we won­dered then whether just show­ing peo­ple a pho­to­graph of a big stack of mon­ey might actu­al­ly make them savor less.

So to find out, we con­duct­ed an exper­i­ment very much like one that many of you have already par­tic­i­pat­ed in this morn­ing. On your way into the the­ater, many of you were prob­a­bly offered a lit­tle piece of choco­late from my lab. Some of you may have noticed that for what­ev­er rea­son there was a pho­to­graph of a big stack of mon­ey on your choco­late. For oth­ers the same pho­to­graph was blurred beyond recognition. 

Now, I want to sug­gest to you that those of you who saw the pho­to­graph of the big stack of mon­ey on your choco­late may have enjoyed your choco­late less. I real­ize this sounds a lit­tle improb­a­ble, but that’s exact­ly what we found in a recent study. 

So we went up to peo­ple on our cam­pus at the University of British Columbia and we just asked them to eat a lit­tle piece of choco­late. Right before they ate the choco­late, we showed them a pho­to­graph of a big stack of our col­or­ful Canadian mon­ey, or a neu­tral pho­to. Meanwhile, we had sta­tioned observers near­by who could sur­rep­ti­tious­ly watch our par­tic­i­pants eat their choco­lates. What we found was that peo­ple who have been exposed to the pho­to­graph of the mon­ey spent less time eat­ing their choco­late and exhib­it­ed sig­nif­i­cant­ly less enjoy­ment of it, as rat­ed by our observers. 

So this sug­gests, then, that mon­ey can actu­al­ly get in the way of hap­pi­ness by under­min­ing our capac­i­ty to savor. But if you go back to work on Monday and your boss is real­ly hap­py that you went to PopTech, and wants to offer you a big raise, I don’t want to sug­gest that you should turn it down. So, the rela­tion­ship between mon­ey and hap­pi­ness is pos­i­tive. It’s just that this rela­tion­ship is a lot weak­er than most peo­ple assume. And our research helps to illu­mi­nate why by speak­ing to this white arrow. 

So, in the sec­ond half of today’s talk I want to turn to the black arrow and think about how we can squeeze the most hap­pi­ness from our mon­ey. Now, this turns out to be a chal­lenge. As Robert Frank put it in an arti­cle enti­tled ​“How Not to Buy Happiness,” ​“People do not spend their extra mon­ey in ways that yield sig­nif­i­cant and last­ing increas­es in mea­sured sat­is­fac­tion.” In oth­er words, peo­ple don’t spend their mon­ey right. 

So, armed with my new­found wealth and a team of grad­u­ate stu­dents, I want­ed to fig­ure out how peo­ple could use their mon­ey bet­ter. In par­tic­u­lar, I won­dered whether peo­ple might actu­al­ly get more hap­pi­ness from spend­ing their mon­ey on oth­ers rather than on themselves. 

Now, to test this I had to make a lit­tle mon­ey fall from the sky. So we went out on cam­pus and just hand­ed peo­ple either a five a twenty-dollar bill ran­dom­ly in the morn­ing. And we asked them to spend this mon­ey by 5:00 PM that day. We told some peo­ple, ​“Hey, we want you to spend this mon­ey on your­self.” We told oth­ers, ​“We want you to spend this mon­ey on some­one else.”

So what did peo­ple do when they found them­selves with this bit of extra cash? Well, when we told peo­ple to spend the mon­ey on them­selves, they did things like buy­ing hear­ings, eye shad­ow, and food or drink for them­selves. By con­trast, when we told them to spend mon­ey on some­one else, they did things like buy­ing toys for younger sib­lings, mak­ing dona­tions to char­i­ty, as well as buy­ing food or drink for friends.

So the ques­tion is which type of spend­ing will leave peo­ple hap­pi­er at the end of the day? Well, when we called peo­ple back that night, par­tic­i­pants who had been told to spend the mon­ey on some­body else were sig­nif­i­cant­ly hap­pi­er than those who’d spent the mon­ey on them­selves. Of course we con­duct­ed this exper­i­ment in Vancouver. We con­duct­ed our oth­er ini­tial research in the United States. So we won­dered whether we might real­ly be look­ing at North American phe­nom­e­non. Many peo­ple have por­trayed North America as a kind of cul­ture of excess, so maybe our find­ing is real­ly lim­it­ed to this rather weird cul­tur­al context. 

We thought, how­ev­er, that maybe we were look­ing at a broad­er human phe­nom­e­non, in which case we should be able to detect the same kind of effect else­where in the world, even in much poor­er coun­tries. Now, at the time it just so hap­pened that my fiancé, who is an envi­ron­men­tal engi­neer, was con­duct­ing some vol­un­teer work in the East African nation of Uganda. So I asked him whether between find­ing safe, clean sources of fresh water for the peo­ple of Uganda, whether he could also maybe find me some col­lab­o­ra­tors in that coun­try. He suc­ceed­ed, and with the amaz­ing help of these local col­lab­o­ra­tors we were able to con­duct simul­ta­ne­ous research in Canada and Uganda.

This time rather than mak­ing mon­ey fall from the sky, we want­ed to see how peo­ple spent their own mon­ey in their day-to-day lives and look at the emo­tion­al con­se­quences of that real-world spend­ing. So we asked peo­ple to look back and real­ly vivid­ly reflect on a time when they’d spent mon­ey on oth­ers or on them­selves. So we asked peo­ple to think about a time they had spent either twen­ty Canadian dol­lars or its equiv­a­lent ten thou­sand Ugandan shillings. We’re giv­ing peo­ple in the two coun­tries the same instruc­tions. Half the peo­ple are told, ​“Hey, tell us about a time you spent this mon­ey on your­self.” Half are told to tell us about a time they spent the mon­ey on some­body else.

Now, even though we gave peo­ple exact­ly the same instruc­tions, the kinds of spend­ing expe­ri­ences that peo­ple described in these two coun­tries were very dif­fer­ent. For exam­ple, in Canada one per­son wrote when asked to talk about a time when they’d spent mon­ey on some­one else, they wrote, ​“I spent $20 for 2 dozen red ros­es from Costco for my moth­er’s birth­day.” Very nice. Very dif­fer­ent from what we see in Uganda, where for exam­ple one per­son wrote, ​“I gave mon­ey to a friend of approx­i­mate­ly 12,000 Ush to buy med­ica­tion for his aching ulcers.”

Now, I have to be hon­est with you. When I was read­ing through these ques­tion­naires, I thought to myself, ​“Okay, we are head­ing for a nec­es­sary fail­ure. We are not going to repli­cate the same effect that we’ve seem in Canada in Uganda,” because the spend­ing expe­ri­ences peo­ple were describ­ing just seemed so dif­fer­ent. And yet, to my sur­prise we found exact­ly the same effect in both coun­tries, where­by peo­ple felt sig­nif­i­cant­ly hap­pi­er when they looked back and reflect­ed on a time when they’d spent mon­ey on oth­ers rather than on themselves. 

So hav­ing seen these robust effects around the world, we won­dered whether the ben­e­fits of finan­cial gen­eros­i­ty might extend beyond the indi­vid­ual to teams and orga­ni­za­tion. So to look at this idea, we teamed up with a real­ly inno­v­a­tive non­prof­it called Karma Currency. Here’s how Karma Currency works. Let’s say that you are the President of a large bank, and your bank wants to make a major dona­tion to char­i­ty. You could just write one big fat check and be done with it. Or you could divide up that con­tri­bu­tion among your employ­ees and give each one of them a vouch­er for Karma Currency. Your employ­ees could then log in to Karma Currency and make a dona­tion on behalf of the com­pa­ny to the char­i­ty of their own choice.

So we won­dered, then, whether giv­ing employ­ees the oppor­tu­ni­ty to active­ly par­tic­i­pate in cor­po­rate giv­ing may actu­al­ly increase their own job sat­is­fac­tion. So to find out, we ran­dom­ly assigned some employ­ees at a large Australian bank to receive a hundred-dollar vouch­er for Karma Currency. Some peo­ple got it, some peo­ple did­n’t, so we could look at the impact. What we found was that giv­ing employ­ees the oppor­tu­ni­ty to give sig­nif­i­cant­ly increased their job sat­is­fac­tion. And I think this is pret­ty inter­est­ing in light of some recent head­lines about the very low lev­els of job sat­is­fac­tion cur­rent­ly in America. So this sug­gests that actu­al­ly enabling peo­ple to be gen­er­ous can pro­vide a sort of sur­pris­ing route to increas­ing their own satisfaction.

Now, push­ing this idea even fur­ther, we want­ed to see whether finan­cial gen­eros­i­ty might not only improve employ­ees’ job sat­is­fac­tion but also increase per­for­mance with­in teams. To look at this idea, we exam­ined two very dif­fer­ent kinds of teams, phar­ma­ceu­ti­cal sales teams in Belgium, and dodge­ball teams in Canada. So, what we did is we went in to each team and we gave a few peo­ple on each team a lit­tle bit of mon­ey to spend. On some teams, we told every­one, ​“Okay, just spend this mon­ey on your­selves.” On oth­er teams we said, ​“Alright, we want you to spend this mon­ey on your teammates.”

Well, as it turned out, when peo­ple had the oppor­tu­ni­ty to spend mon­ey on their team­mates, phar­ma­ceu­ti­cal sales teams sold more drugs and dodge­ball teams won more games. So, this sug­gests that spend­ing mon­ey on oth­ers may be a good way to go whether you want to change the world, increase your own hap­pi­ness, or just win a game of dodgeball. 

Now, if you go out­side today and find that the love­ly Camden sun­shine has been replaced by a down­pour of cash, I would encour­age you to go ahead and grab some of it, but think about spend­ing some of it on oth­ers. And of course don’t for­get to take a lit­tle extra time to enjoy your choco­late. Thank you.