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People
strive for happiness. Some synonyms of happiness are: contentment, enjoyment,
well-being or prosperity. (Thesaurus, n.d.) People can apply several techniques
to achieve their goal, such as prosocial spending. In psychology, the term
“prosocial” describes a positive behaviour which is helpful, and intended to
promote social acceptance and friendship. (Oxford Dictionary, n.d.) According
to the prior definition, “prosocial spending” describes the spending behaviour
in which one spends money on others instead of oneself. Psychologists and
Sociologists argue that prosocial spending enhances the chances to achieve
greater happiness. In the following review, we will look at three different articles,
concerning the idea of prosocial spending and its effect on happiness. Each of
the articles will emphasise different viewpoints, which will be evaluated,
compared and contrasted.

The
article “spending money on others promotes happiness” (2008) discusses in what
circumstances and extent spending money influences happiness. Although a lot of
research on this topic has already been done, they hypothesise that spending
money on others might have more positive impact on happiness than spending
money on oneself. Researched by Elizabeth W. Dunn, Lara B. Aknin and Michael I.
Norton, this study provides us with the finding that spending money for a
prosocial purpose predicts greater happiness both cross-sectionally and
longitudinally.

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In
their article, the researchers suggest that how much people are spending money
is at least as important as how much they earn. (Elizabeth W. Dunn, 2008) Thus,
a cross-sectional study has been conducted and has proven that income has a
reliable, but weak effect on happiness. However, greater wealth is indeed a
weak predictor for happiness, because people rather invest their increased
wealth in luxury goods than into pursuits, which provide long lasting
happiness. This can be explained by the phenomenon that the more an individual
thinks of money, the less likely a person will be spending it on prosocial
purposes, such as spending time with others or donating for charity. These are
the kinds of behaviour that promote happiness the most. Consequently, this
leads to the argument that investing income on others rather than on oneself is
likely to have significant benefits for one’s own happiness.

In
their study, 632 subjects were asked to rate their general happiness, report
their annual income and estimate how much they spend in a typical month on
bills and expenses, gifts to themselves, gifts for others and donations for
charity. In this questionnaire, the first two questions were grouped and named
“personal spending”, the latter two were also grouped and called “prosocial
spending”, which was needed to evaluate the data. The researchers found that
personal spending wasn’t related to happiness, while higher prosocial spending was
related to significantly greater happiness. Another test has been conducted in
order to prove the hypothesis, 16 employees’ levels of happiness were examined
one month before and approximately 2 months after they received a
profit-sharing. In the later questionnaire, they were asked to report on what
they spent the extra money they got from the company. This study provided the
researchers with the same findings as the previous survey, which supported
their hypothesis. A last experiment was conducted in which 46 participants were
randomly assigned to the following two conditions: all participants got $5 or
$20, half of the participants were told to use the money for personal spending,
the others were told to use the money for prosocial spending. The prosocial
spending group experienced greater happiness, regardless of whether they had
gotten $5 or $20, leading to the same outcome as the previous two
investigations. No significant difference was found between the levels of
happiness when it comes to the amount of money spent.

Based
on the prior paper, Lara B. Aknin states in her article “It’s the Recipient
That Counts: Spending Money on Strong Social Ties Leads to Greater Happiness
than Spending on Weak Social Ties” (2011) that the emotional outcome of spending
money on others differs depending on whether the target is a strong or weak
social tie. In this study, the distinction between strong ties and weak ties is
made, which subcategorises prosocial spending. (Lara B. Aknin, Gillian M.
Sandstorm, Elizabeth W. Dunn, Michael I. Norton, 2011) This distinction has
been done, because the level of intimacy rather predicts the strength of a
relationship than the type of relationship. Sociologists label weak ties as
relationships that involve less frequent contact, less emotional intensity and
less intimacy, whereas strong ties are in contrast to them. 

When
individuals are spending money on each other, it provides them with the
opportunity to spend time with the targeted person. This behaviour leads to a
satisfying relationship with the targeted person who is most likely someone
with whom one has a strong social tie, which results in greater happiness. Relationships
with weak ties or strangers can also affect our happiness providing us with
similar beneficence, although not as effectively as the previous model. Thereby,
it is most interesting to find supporting evidence for their hypothesis.

Researchers
assigned 79 participants to one of two spending recall conditions. They had to
recall the last time they spent approximately $20 on either someone they
consider to be a strong social tie or a weak one. When doing so, they were
reported their current affect levels on the Positive and Negative Affect
Schedule (PANAS). Furthermore, they reported details about the spending
experience, including how long ago the event has occurred. Researchers have
predicted that recalling a purchase made for a strong social tie would reveal
higher levels of happiness. The prediction was supported by the PANAS scale.

In
this study subjects were asked to recall prior spending experiences, which led
the researcher to their conclusion. Although the researchers came to satisfying
results, they could have conducted another run, in which participants would have
particularly been asked to engage in one of the conditions. The results of this
experimental run should meet the findings from the previous observations in
order to strengthen their hypothesis. In case the newly gained data would
differ from the former ones, the long lasting of emotional response could be
questioned. Furthermore, comparing to the aforementioned article, this article
provides less observational or experimental runs, even if the proposed
experiment had been conducted. Therefore, it can be assumed that the latter
article may be not as reliability as the article on which it is based.

Based
on previous studies, Mana Yamaguchi et al. published their study “Experiential
purchases and prosocial spending promote happiness by enhancing social
relationships” in 2015 and conducted their research in Japan. The study shows
whether undergraduate students’ consumption behaviours during summer break
would be associated with their post-break happiness and whether the
consumption-happiness relationship would be mediated by a positive influence on
their social relationships. (Mana Yamaguchi, Ayumi Masuchi, Daisuki Nakanishi,
Sayaka Suga, Naoki Konishi, Ye-Yun Yu, Yohsuke Ohtsubo, 2015). Considered that
the research is based on western outcomes, it takes into account that Van
Boven’s and Gilovichs’s (2003) work revealed that the people felt happier after
spending money on experiences, than on material items while Caprariello’s and
Ries’s work revealed that the social purchase made respondents happier than
solidary purchases. Therefore, they sorted out that relationships are essential
to the happiness-enhancing effect on experiential purchases. It is claimed that
wealth is a source of happiness and feelings of subjective well-being, although
its effect is modest. Therefore, the mere possession of money seems to be less
important than the way it is invested in order to achieve greater happiness and
subjective well-being.

The
spending on experiential purchases and prosocial purchases were more likely to
have a positive influence on social relationships than luxury and self-enriching
purchases, stated by M. Yamaguchi et al., with the two following hypotheses:
“Experiential purchases during summer break make the purchasers happier when
they had a positive influence on the purchasers’ social relationships” and
“Prosocial spending during summer break makes the purchasers happier when they
had a positive influence on the purchasers’ social relationships.

In
order to find supporting evidence for their claim, they assigned 1523
undergraduate participants from 4 different university were asked to fill out a
five-sectioned questionnaire, containing a section comprising a brief test of
the five-factor personality traits and two items measuring happiness, a second
comprising a proxy measure of the students’ financial resources, and the third
to fifth section asking about participants’ experiential, luxury and prosocial
spending. The obtained data supports their hypotheses. Therefore, both
prosocial and experiential spending were associated with greater post-break
happiness given that these purchases influenced the participants’ social
relations in a positive manor. The effects remained significant after
controlling for respondents’ personality traits, financial situation and sex.

Since
the study consists of only undergraduates, it is hard to generalise their
findings on other social groups than students. Most of the subjects might be
financially dependent on their parents, which might interfere with their
consumption behaviours. They would probably spend their money differently if it
was their own. Lastly, the reliability of this article can be questioned,
because it is based on western psychological findings, while it is conducted
within an eastern culture. This may also interfere with the generalisation on
western societies.

In
conclusion, Elizabeth W. Dunn’s article provides us with the finding that
prosocial spending leads to happiness. Elizabeth W. Dunn et al. conducted
several investigations, giving more information about the extent of the effect.
For instance, the amount of money spent on others doesn’t affect the happiness
experienced nor is greater wealth a reliable predictor for happiness. Based on
this, a later study has been conducted by Lara B. Aknin et al., investigating
the beneficence of strong social ties. They concluded that spending money on
strong ties is more likely to lead to greater happiness. It strengthens interhuman
relations, thus raising the quality and quantity of time spent together. This
study contains only one investigation, therefore an experimental run is
advisable in order to get more insight into the lasting effect of spending
experiences. Lastly, M. Yamaguchi et al. demonstrate that next to prosocial
spending, experiential spending is the most lucrative investment of all,
because it provides both the targeted person and the purchaser with common spent
time. Their hypothesis is supported by the data obtained. However, it is
uncertain if their findings are reliable, because it is performed based on
western studies and it is questionable if it can be applied to western cultures
or others than undergraduates. The three studies in combination give an
extensive insight into the thematic of the interaction of spending money and
gaining happiness.

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