Study: Maybe Money Really Can Buy Happiness

July 10, 2008 10:47 AM
by Liz Colville
Splurging occasionally may make consumers happier long-term than spending cautiously, a forthcoming study in the Journal of Marketing Research suggests.

30-Second Summary

Tightwads may actually be worse off emotionally than big spenders, at least in the long run, according to two researchers at Columbia University and Harvard University.

An analysis of 57 consumers found that those who focused on the near future as it related to their purchase tended to spend less, whereas those who considered the long-term implications of their purchase spent more.

The study suggests that those with “hyperopia,” or excessive farsightedness, focused less on purchases that would make them happy and more on cheaper purchases that helped them save money for essentials.

But this study and previous work by the same authors indicated that a “broader perspective” on the consequences of spending “highlights the importance of enjoying life and reduces concerns with being frugal and prudent.”

The authors suggest that marketers can communicate this broad perspective to consumers, focusing on the long-term pleasure that comes from indulgent opportunities and the regret that comes from not having taken them. “In the words of the late Mass. Sen. Paul Tsongas, “Nobody on his deathbed ever said, ‘I wish I had spent more time at the office.’”

The paradox of this perspective is in the often pallid short-term benefits of extravagant spending, which can lead to compulsive spending and addiction. As Jonah Lehrer, author of “Proust was a Neuroscientist,” notes, “Once we purchase something, we automatically start taking it for granted, and to begin yearning for something new.”

Headline Link: ‘When Virtue is a Vice’

Background: Compulsive buying and consumer regret

Opinions & Analysis: Spending habits and well being


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