Can You Buy Happiness?
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What makes us happy? When it comes to making purchases, do more expensive items give us more enjoyment in the long run?

When it comes to your happiness, who should you be most wary of upselling items and features to make you happy?
Humans are very good at predicting what will make us happy in the future.
The more we understand how our mind works, the better decisions we can make. And the more control we take when making purchase decisions, the more control we have over our own happiness.
What happens to new things after awhile?
Imagine you’re shopping at the store and you’ve narrowed your choice down to two TVs. After comparing them, you should get the one that has the most new features for the money because it’s more likely you’ll be happier with it.

Right!

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Needs vs. Wants Challenge

The next time you make a major purchase, take a step back and be realistic about your needs and goals. Make a list of features you are looking for and categorize them based on whether they are necessary (“needs”) or nice to have (“wants”). Then compare your options based on these features and try to keep your purchase to the things you really need — you will likely get just as much enjoyment from the less expensive purchase in the long run.

Session Q & A

  • Reflecting the fact that decision making is something we do every day in just about every context, Decision Science is a very wide and diverse field of study. Some topics I study include how we make judgments, and the accuracy of those judgments; how do groups or teams make decisions; how does our memory and personal experiences shape the decisions we make today?

    Some of my research has looked at how our goals or thresholds affect our perceptions of value. For example; you’re buying a house and you’ve narrowed it down to two houses with one costing $5,000 more than the other. All else equal, if you have a certain budget in mind that $5,000 can seem larger or smaller depending on how close it is to your budget. If both houses are far below your budget that $5,000 is going to have little impact and you’ll probably opt for the more expensive house. If both houses are near your budget the same $5,000 will have a bigger impact and might draw you towards the cheaper house. This is a result of how we perceive everything in a relative manner and it’s true for large or small purchases and items that are both above or below the budget.

    Very recently I’ve started to explore decision making in the presence of online recommendation systems. Companies like Netflix and Amazon try to help us make decisions by providing recommendations of movies or products they think we might like. How accurate are they, and how much do we trust them? Have you ever been personally offended by a recommendation from Netflix? That really interests me!

  • That’s a really good question. Unfortunately for me, the brain doesn’t have a happy-meter that I can take direct readings from, so I just have to ask people. One measure that is commonly used to study happiness is called the Satisfaction With Life Scale, which is a series of statements such as “In most ways my life is close to my ideal,” which people rate in terms of how much they agree with the statement. Using tools like this as a measure of happiness has allowed scientists to answer the question, “Does money make us happy?” The answer is yes, but only to a point. If you ask people how happy or satisfied with life they are and look at the relationship between happiness and income, there is a positive relationship between income and happiness up to $78,000 a year. Beyond that, more money doesn’t relate at all to increased happiness. In terms of individual possessions, we can ask people how much happiness they get from their new kitchen, for example. While that may be a bit imprecise, if we ask the same person repeatedly over time we can get a clear sense of the trend.

  • That’s a great question. There are several techniques that have been designed to help people make difficult decisions. Decision trees and moral algebra are two of the more common. What each method has in common is that they encourage people to break down any decision into its component parts (how much will it cost, what are the individual benefits, what are the possible risks) and spend some time reflecting on how important each of these aspects is. Regardless of which method people use, breaking it down into parts and thinking about it usually makes the best decision for them evident. That being said, there is a lot of research showing that, retrospectively, people are happier with the experiences they purchased (i.e., vacations) than products they’ve purchased.

  • Well, that's up to you. But before you do so, it's important to keep in mind that research has shown that humans aren't very accurate at predicting what will make them happy or not in the future. One reason we're not good at predicting our future happiness is that the human mind is incredibly skilled at adapting. When we buy a new car or make any other purchase, we tend to really enjoy the new item, at first. Eventually, however, we get accustomed to the new purchase and we lose the happiness we had gained from the novelty of something new. With time, our shiny new car just becomes the vehicle that takes us to the grocery store.

  • No matter what you're looking to buy, it's important to take a step back and be realistic about your needs and goals. Say you're deciding between two televisions that differ in size. Once you make the decision and you're curled up on the couch watching your favorite show, you won't be comparing the screen to the other one in the store. Instead, you're living with the decision that you made, so be sure to keep this in mind while you're still in the decision making process. The more we understand how our mind processes information when we make decisions, the more control we can have over our decisions, their consequences, and ultimately our own happiness!

Jason L. Harman, PhD

Jason L. Harman is an Assistant Professor of Industrial and Organizational Psychology at Louisianan State University. He researches how the human mind makes decisions and how understanding memory, attention, and learning can help us make better decisions. Particularly, he studies decision making related to finance, health and the environment. Jason received his Ph.D. in Cognitive Psychology from Ohio University and spent three years as a post doctoral fellow in Decision Sciences at Carnegie Mellon University. He has won awards for both his teaching and research and his work has been published in leading journals of Psychology, Organizational Behavior and Computer Science.

Jason L. Harman is an Assistant Professor of Industrial and Organizational Psychology at Louisianan State University. He researches how the human mind makes decisions and how understanding memory, attention, and learning can help us make better decisions. Particularly, he studies decision making related to finance, health and the environment. Jason received his Ph.D. in Cognitive Psychology from Ohio University and spent three years as a post doctoral fellow in Decision Sciences at Carnegie Mellon University. He has won awards for both his teaching and research and his work has been published in leading journals of Psychology, Organizational Behavior and Computer Science.

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