Prosocial Spending and Happiness: Using Money to Benefit Others Pays Off

Abstract

Although a great deal of research has shown that people with more money are somewhat happier than are people with less money, our research demonstrates that how people spend their money also matters for their happiness. In particular, both correlational and experimental studies have shown that people who spend money on others report more happiness. The benefits of such prosocial spending emerge among adults around the world, and the warm glow of giving can be detected even in toddlers. These benefits are most likely to emerge when giving satisfies one or more core human needs (relatedness, competence, and autonomy). The rewards of prosocial spending are observable in both the brain and the body and can potentially be harnessed by organizations and governments.

Full text

http://cdp.sagepub.com/
Science
Current Directions in Psychological
http://cdp.sagepub.com/content/23/1/41
The online version of this article can be found at:
DOI: 10.1177/0963721413512503
2014 23: 41Current Directions in Psychological Science
Elizabeth W. Dunn, Lara B. Aknin and Michael I. Norton
Prosocial Spending and Happiness: Using Money to Benefit Others Pays Off
Published by:
http://www.sagepublications.com
On behalf of:
Association for Psychological Science
can be found at:Current Directions in Psychological ScienceAdditional services and information for
http://cdp.sagepub.com/cgi/alertsEmail Alerts:
http://cdp.sagepub.com/subscriptionsSubscriptions:
http://www.sagepub.com/journalsReprints.navReprints:
http://www.sagepub.com/journalsPermissions.navPermissions:
What is This?
- Feb 3, 2014Version of Record >>
by Lara Aknin on February 5, 2014cdp.sagepub.comDownloaded from by Lara Aknin on February 5, 2014cdp.sagepub.comDownloaded from

Current Directions in Psychological
Science
2014, Vol. 23(1) 41 –47
© The Author(s) 2014
Reprints and permissions:
sagepub.com/journalsPermissions.nav
DOI: 10.1177/0963721413512503
cdps.sagepub.com
Imagine digging out your jacket for the first time since
winter and discovering a crumpled $20 bill in the pocket.
How would you spend this windfall? Would you buy
your partner a bouquet of yellow tulips? Would you give
the cash to the homeless man you pass everyday on your
way to work? Or would you buy yourself a vegetable
panini for lunch? These questions reflect a broader
human dilemma: What is the best way to use our money
to maximize our happiness?
A large body of research on the overall relationship
between money and happiness has shown that individu-
als with more money are happier (e.g., Diener, Ng,
Harter, & Arora, 2010; Diener, Tay, & Oishi, 2013),
although this relationship is weaker than many people
assume (Aknin, Norton, & Dunn, 2009; Kahneman,
Krueger, Schkade, Schwarz, & Stone, 2006; but see Cone
& Gilovich, 2010). But how people spend their money
may be at least as important as the amount of money
they have (Dunn & Norton, 2013).
In an initial experiment, we approached people on a
university campus and gave them either $5 or $20 to
spend by the end of the day (Dunn, Aknin, & Norton,
2008). We instructed half of the participants to spend the
money on themselves (personal spending) and half to
spend the money on someone else (prosocial spending).
That evening, people who had been assigned to spend
the money on someone else reported happier moods
over the course of the day than did those people assigned
to spend the money on themselves. It is interesting that
the amount of money the participants received had no
bearing on their happiness.
When we described the experiment to other partici-
pants, however, their predictions were doubly wrong:
They believed that they would be happier spending more
money ($20 vs. $5) and that they would be happier
spending it on themselves. Thus, people’s daily spending
choices may be guided by flawed intuitions about the
relationship between money and happiness. Indeed,
research has suggested that just being reminded of
money may make people less attuned to the needs of
others (Vohs, Mead, & Goode, 2006). Thinking about
money may propel individuals toward using their finan-
cial resources to benefit themselves, but spending money
512503CDPXXX10.1177/0963721413512503Dunn et al.Prosocial Spending and Happiness
research-article2014
Corresponding Author:
Elizabeth W. Dunn, Department of Psychology, University of British
Columbia, Douglas Kenny Building, 2136 West Mall, Vancouver,
British Columbia V6T 1Z4, Canada
E-mail: edunn@psych.ubc.ca
Prosocial Spending and Happiness: Using
Money to Benefit Others Pays Off
Elizabeth W. Dunn1, Lara B. Aknin2, and
Michael I. Norton3
1Department of Psychology, University of British Columbia; 2Department of Psychology,
Simon Fraser University; and 3Marketing Unit, Harvard Business School
Abstract
Although a great deal of research has shown that people with more money are somewhat happier than are people
with less money, our research demonstrates that how people spend their money also matters for their happiness. In
particular, both correlational and experimental studies have shown that people who spend money on others report
more happiness. The benefits of such prosocial spending emerge among adults around the world, and the warm glow
of giving can be detected even in toddlers. These benefits are most likely to emerge when giving satisfies one or more
core human needs (relatedness, competence, and autonomy). The rewards of prosocial spending are observable in
both the brain and the body and can potentially be harnessed by organizations and governments.
Keywords
money, prosocial spending, happiness, well-being
by Lara Aknin on February 5, 2014cdp.sagepub.comDownloaded from

42 Dunn et al.
on others can provide a more effective route to increas-
ing one’s own happiness.
Is the Warm Glow of Giving Universal?
Our initial research on prosocial spending and happiness
was conducted in North America, where people enjoy a
level of wealth that is highly atypical compared with liv-
ing conditions experienced throughout human history
and much of the world today. As a result, the emotional
benefits of giving might be dampened or eliminated in
countries in which many people are still struggling to
meet their own basic needs. Discovering that people
derive emotional benefits from prosocial spending even
in poorer countries, however, would provide evidence
that the warm glow of giving may be a fundamental com-
ponent of human nature. We examined the correlation
between charitable giving and happiness in 136 countries
(Aknin, Barrington-Leigh, et al., 2013). In 120 of the
countries, there was a positive relationship between giv-
ing and happiness (when we controlled for income and
other demographic variables), and this relationship was
significant in a majority of the countries (see Fig. 1 for
world map). Although the strength of the relationship
varied among countries, individuals in poor and rich
countries alike reported more happiness if they engaged
in prosocial spending.
We also provided causal evidence for the emotional
rewards of prosocial spending in an economically diverse
group of countries, including Canada, India, South Africa,
and Uganda (Aknin, Barrington-Leigh, et al., 2013). In
one experiment conducted in both Canada and South
Africa, participants were given the opportunity to spend
money on a “goody bag” filled with treats (such as choc-
olate). Half of the participants were told that they would
receive the goody bag they purchased (personal spend-
ing), and half were told that a sick child in a local hospi-
tal would receive the goody bag (prosocial spending).
Participants who bought a gift bag for a sick child
reported significantly happier mood than did participants
who purchased the same goody bag for themselves. This
finding is particularly notable, given that more than 20%
of the South African sample reported not having enough
money to buy food for themselves or their families in the
preceding year.
These results suggest that the capacity to derive joy
from giving might be a universal feature of human psy-
chology. If this is the case, then even young children
might experience happiness from giving to others. We
gave toddlers just under the age of 2 a pile of appealing
Fig. 1. World map displaying the relationship between prosocial spending and happiness around the globe. From “Prosocial Spending and Well-
Being: Cross-Cultural Evidence for a Psychological Universal,” by L. B. Aknin, C. P. Barrington-Leigh, E. W. Dunn, J. F. Helliwell, J. Burns, R. Biswas-
Diener, . . . M. I. Norton, 2013, Journal of Personality and Social Psychology, 104, p. 639. Copyright by the American Psychological Association.
Reprinted with permission.
by Lara Aknin on February 5, 2014cdp.sagepub.comDownloaded from

Prosocial Spending and Happiness 43
treats (e.g., goldfish crackers; Aknin, Hamlin, & Dunn,
2012). The children were asked to give one of their treats
away to a puppet who enthusiastically ate the treat (see
Fig. 2 for images from each phase of the study). In addi-
tion, the experimenter “found” an extra treat, which she
asked the child to give to the puppet. Research assistants
coded children’s facial expressions for happiness.
Children exhibited more happiness when they gave treats
away to the puppet than when they received treats them-
selves (see Fig. 3 for coded happiness ratings). Moreover,
children showed the highest levels of happiness when
they gave a treat away from their own stash (vs. the experi-
menter’s extra treat). Taken together, this research showed
that adults around the world and even young children
experience emotional benefits from using their resources
to help others, which suggests that humans may have a
deep-seated proclivity to find giving rewarding.
When Does Prosocial Spending
Promote Happiness?
The argument that humans have a universal tendency to
experience joy from giving does not mean that every
form of prosocial spending always produces emotional
benefits. Most people can probably think of a time when
they did something generous and did not experience
a boost in happiness, and the existing literature has con-
firmed that giving does not always produce joy (e.g.,
Berman & Small, 2012). Self-determination theory pro-
vides a framework for understanding when and why
giving leads to happiness (Weinstein & Ryan, 2010).
According to this theory, human well-being depends on
the satisfaction of three basic needs: relatedness, compe-
tence, and autonomy. Although prosocial spending is
certainly not the only way to fulfill these needs—and it
may also be possible to meet these needs through per-
sonal spending—we suggest that prosocial spending
should be most likely to produce happiness under condi-
tions that satisfy these needs.
Relatedness
Helping others may be most emotionally rewarding when
it satisfies the fundamental need for social connection.
Consistent with this idea, we found that individuals gar-
ner more happiness from prosocial spending when giv-
ing provides the opportunity to connect with other
people (Aknin, Dunn, Sandstrom, & Norton, 2013). In
Fig. 2. Example images of four phases from Aknin, Hamlin, and Dunn’s (2012) toddler sharing study. Tod-
dlers were introduced to a puppet (a) and given eight treats (b). Then, in counterbalanced order, each toddler
was asked to give the experimenter’s extra treat to the puppet (c) and to give one of their own treats to the
puppet (d). A sample video is available at http://cic.psych.ubc.ca/Example_Stimuli.html.
by Lara Aknin on February 5, 2014cdp.sagepub.comDownloaded from

44 Dunn et al.
one experiment, participants who received a $10
Starbucks gift card were happier if they spent it on a
friend rather than on themselves—but only if they took
the time to go to Starbucks with their friend. In another
study, we found that individuals get the biggest happi-
ness bang for their buck when they spend money on
close others rather than on acquaintances (Aknin,
Sandstrom, Dunn, & Norton, 2011), perhaps because
close relationships are especially critical for satisfying the
need to belong (Baumeister & Leary, 1995).
Competence
Prosocial spending is most likely to satisfy the need for
competence if people can see how their generous actions
have made a difference. Thus, individuals may experi-
ence a bigger happiness boost from giving to charities
that make it easy to see the positive impact of donations.
For example, both UNICEF and Spread the Net are
deserving charities dedicated to improving children’s
health in impoverished areas of the world, but Spread the
Net offers a clear, concrete promise: For every $10
donated, the charity will provide a bed net to protect a
child at risk of malaria. When we gave participants the
opportunity to donate money to Spread the Net, indi-
viduals who donated more money felt happier, control-
ling for happiness before the donation (Aknin, Dunn,
Whillans, Grant, & Norton, 2013). In contrast, giving
money to UNICEF provided no such benefit. People
derive more happiness from prosocial spending if they
feel like effective, competent helpers whose actions have
made a real difference.
Autonomy
Because the need for autonomy is satisfied when people
feel that their actions are freely chosen, the emotional
benefits of prosocial spending should be stronger when
people have a choice about whether to give. In one
study, participants inside a scanner exhibited stronger
activation in reward areas of the brain when they freely
donated to a local charity compared with when they
were required to make a donation (Harbaugh, Mayr, &
Burghart, 2007). Weinstein and Ryan (2010) showed that
people experienced happier moods when they gave
more money away—but only if they had a choice about
how much to give. When participants were given a
choice, the donation of more money led them to feel
more autonomous, as well as more related and compe-
tent. The effect of giving on happiness was mediated by
overall satisfaction of the three basic needs, which dem-
onstrated that these needs are deeply intertwined.
Taken together, this research suggests that the emo-
tional benefits of prosocial spending are likely to be
greatest when giving satisfies the needs for relatedness,
competence, and autonomy. When prosocial spending
fails to increase happiness—in everyday life or in a psy-
chology experiment—consider whether the giving
opportunity could be redesigned to increase the likeli-
hood that one or more of these needs is satisfied. By
3
3.5
4
4.5
5
5.5
6
(a) Child
Meets Puppet
(b) Child Receives
Eight Treats
(c) Child Gives the
Experimenter’s
Extra Treat to Puppet
(d) Child Gives Own
Treat to Puppet
Happiness as Rated by Coders
Fig. 3. Children’s happiness, as rated by coders, for four phases of the toddler sharing study (Aknin,
Hamlin, & Dunn, 2012). Error bars represent 95% confidence intervals around the mean.
by Lara Aknin on February 5, 2014cdp.sagepub.comDownloaded from

Prosocial Spending and Happiness 45
doing so, charities can maximize the emotional benefits
of giving for their donors, thereby potentially increasing
the likelihood of repeat donations; the happier people
feel when reflecting on previous prosocial spending, the
more likely they are to spend on others in the future
(Aknin, Dunn, & Norton, 2012).
Beyond Happiness
Although happiness is most frequently assessed though
simple self-report measures, the benefits of prosocial
spending can be detected in the brain and the body. As
noted earlier, prosocial spending produces activation in
reward areas of the brain (Harbaugh et al., 2007; Moll
et al., 2006; Zaki & Mitchell, 2011). And the emotional
consequences of prosocial spending produce a cascade
of physical consequences. In a previous study, in the
context of a large classroom, we gave students $10 and
informed them that they could donate as much as they
wished to another student in the class who had not
received any money (Dunn, Ashton-James, Hanson, &
Aknin, 2010). The more money students gave away, the
happier their moods afterward, when we controlled for
their happiness beforehand. Conversely, the more money
students kept for themselves, the more shame they expe-
rienced. And the more ashamed they felt, the higher their
levels of cortisol, a stress hormone that has been linked
to a variety of health problems. These results suggested
that everyday spending decisions can get under the skin
to influence health.
Although any one spending decision likely has short-
lived effects on biological processes, these decisions
may compound over time to shape important health
outcomes. Older adults who report giving more money
and other resources to others exhibit better overall
health—from fewer sleep disorders to better hearing—
even after a wide range of variables are controlled
for (e.g., gender, income, physical mobility; Brown,
Consedine, & Magai, 2005). Experimental research has
shown that prosocial spending can increase physical
strength; participants who had donated to a charity
were able to squeeze a handgrip for more than 20 sec-
onds longer than were control participants (Gray, 2010).
Participants also reported happier moods after donat-
ing, but their enhanced strength did not stem from their
elevated happiness. Thus, prosocial spending may have
independent positive effects on both emotional and
physical vitality.
Future Directions
Researchers should further examine the pathways that
explain how good deeds are transformed into good
feelings. For example, prosocial spending might promote
happiness by endowing givers with a feeling of power or
by enabling them to witness others’ gratitude. Given that
forms of generosity other than prosocial spending also
predict happiness (e.g., volunteering; Thoits & Hewitt,
2001), researchers could explore whether different path-
ways—with different antecedents and consequences—
might explain the emotional benefits of giving money
compared with the giving of other resources.
Most of our research has focused on common forms of
spending, such as treating a friend to coffee or making a
charitable donation. It also would be interesting to inves-
tigate whether the happiness benefits of prosocial spend-
ing extend to “impact investments,” in which people
invest money with the goal of aiding social or environ-
mental causes—while also reaping a financial return. In
addition, future researchers should examine more diverse
forms of prosocial spending, including its most dreaded
form: taxation. Although taxes are rarely associated with
happiness, it may be possible to harness research on the
emotional benefits of prosocial spending to improve
people’s feelings about paying their taxes. Indeed, paral-
lel research has suggested that the benefits of prosocial
spending are most likely to emerge if donors are given a
choice (Weinstein & Ryan, 2010), and new research has
suggested that injecting an element of choice into tax
payments increases taxpayer satisfaction (Lamberton,
2013).
In addition to research on individual happiness,
researchers should examine the broader benefits of proso-
cial spending initiatives within teams and organizations.
For example, Google provides employees with an open
invitation to apply for a bonus—not for themselves, but for
a deserving coworker (Dunn & Norton, 2013). Our most
recent research has provided initial evidence that giving
employees the opportunity to engage in prosocial spend-
ing can potentially enhance job satisfaction and perfor-
mance (Anik, Aknin, Norton, Dunn, & Quiodbach, 2013).
The time is ripe for exploring how “prosocial bonuses” can
improve organizational success.
Finally, many fascinating questions remain unan-
swered regarding individual differences in the proclivity
to engage in prosocial spending and to derive joy from
doing so. For example, could genetic differences in sen-
sitivity to oxytocin (a hormone involved in bonding)
explain why some people get a bigger boost from proso-
cial spending than do others? Do enjoyable early child-
hood experiences with giving lead people to seek out
prosocial spending opportunities, perhaps as a result of
changes in the self-concept? Understanding the individ-
ual-level factors that alter the emotional impact of giving
will offer further insight into the psychology of prosocial
spending.
by Lara Aknin on February 5, 2014cdp.sagepub.comDownloaded from

46 Dunn et al.
Conclusion
In much of the research on money and happiness,
researchers have explored the overall relationship
between these variables; in our research, we have shifted
the focus toward the consideration of how people can
use their money to increase happiness—whether they
have a little or a lot of money. The benefits of prosocial
spending are evident in givers old and young in countries
around the world and extend to not only subjective well-
being but also objective health. Despite people’s intu-
itions and inclinations to the contrary, one of the best
ways to get the biggest payoff personally from a windfall
of $20 is to spend it prosocially.
Recommended Reading
Aknin, L. B., Barrington-Leigh, C. P., Dunn, E. W., Helliwell,
J. F., Burns, J., Biswas-Diener, R., . . . Norton, M. I. (2013).
(See References). Provides a broad review of the relevant
literature, detailed data from around the world, and discus-
sion of alternative explanations.
Diener, E., Ng, W., Harter, J., & Arora, R. (2010). (See References).
Provides a full discussion of research on the relationship
between money and happiness around the world.
Dunn, E. W., Aknin, L. B., & Norton, M. I. (2008). (See
References). Presents our first studies on the correlational
and causal relationship between prosocial spending and
happiness.
Dunn, E., & Norton, M. (2013). (See References). Written for
a broad audience, provides an approachable review of
research on how people can get more happiness from their
money.
Helliwell, J., Layard, R., & Sachs, J. (2012). World happiness
report. New York, NY: The Earth Institute, Columbia
University. Commissioned by the United Nations, offers a
thorough overview of predictors of happiness around the
world.
Author Contributions
Elizabeth W. Dunn and Lara B. Aknin wrote the manuscript.
Michael I. Norton edited the manuscript.
Declaration of Conflicting Interests
The authors declared that they had no conflicts of interest
with respect to their authorship or the publication of this
article.
Funding
The research described in this article was supported by grants
to E. W. Dunn from the Social Sciences and Humanities
Research Council (410-2008-2509) and the Canadian Institutes
of Health Research (MOP-110968). These are government
agencies and do not represent specific interests beyond
advancing science and furthering the general betterment of
society.
References
Aknin, L. B., Barrington-Leigh, C. P., Dunn, E. W., Helliwell,
J. F., Burns, J., Biswas-Diener, R., . . . Norton, M. I. (2013).
Prosocial spending and well-being: Cross-cultural evidence
for a psychological universal. Journal of Personality and
Social Psychology, 104, 635–652.
Aknin, L. B., Dunn, E. W., & Norton, M. I. (2012). Happiness
runs in a circular motion: Evidence for a positive feedback
loop between prosocial spending and happiness. Journal
of Happiness Studies, 13, 347–355.
Aknin, L. B., Dunn, E. W., Sandstrom, G. M., & Norton, M. I.
(2013). Does social connection turn good deeds into good
feelings? On the value of putting the “social” into proso-
cial spending. International Journal of Happiness and
Development, 1, 155–171.
Aknin, L. B., Dunn, E. W., Whillans, A., Grant, A. M., & Norton,
M. I. (2013). Making a difference matters: Impact unlocks
the emotional benefits of charitable giving. Journal of
Economic Behavior & Organization, 88, 90–95.
Aknin, L. B., Hamlin, J. K., & Dunn, E. W. (2012). Giving
leads to happiness in young children. PLoS ONE, 7(6),
e39211. Retrieved from http://www.plosone.org/article/
info%3Adoi%2F10.1371%2Fjournal.pone.0039211
Aknin, L. B., Norton, M. I., & Dunn, E. W. (2009). From wealth
to well-being? Money matters, but less than people think.
Journal of Positive Psychology, 4, 523–527.
Aknin, L. B., Sandstrom, G. M., Dunn, E. W., & Norton,
M. I. (2011). It’s the recipient that counts: Spending
money on strong social ties leads to greater happi-
ness than spending on weak social ties. PLoS ONE, 6(2),
e17018. Retrieved from http://www.plosone.org/article/
info%3Adoi%2F10.1371%2Fjournal.pone.0017018
Anik, L., Aknin, L. B., Norton, M. I., Dunn, E. W., & Quoidbach,
J. (2013). Prosocial spending increases job satisfaction and
organizational commitment. PLoS ONE, 8(9), e75509.
Baumeister, R. F., & Leary, M.R. (1995). The need to belong:
Desire for interpersonal attachments as a fundamental
human motivation. Psychological Bulletin, 117, 497–529.
Berman, J. Z., & Small, D. A. (2012). Self-interest without
selfishness: The hedonic benefit of imposed self-interest.
Psychological Science, 23, 1193–1199.
Brown, W. M., Consedine, N. S., & Magai, C. (2005). Altruism
relates to health in an ethnically diverse sample of older
adults. The Journals of Gerontology Series B: Psychological
Sciences and Social Sciences, 60(3), P143–P152.
Cone, J., & Gilovich, T. (2010). Understanding money’s limits:
People’s beliefs about the income-happiness correlation.
Journal of Positive Psychology, 5, 294–301.
Diener, E., Ng, W., Harter, J., & Arora, R. (2010). Wealth and
happiness across the world: Material prosperity predicts life
evaluation, whereas psychosocial prosperity predicts posi-
tive feeling. Journal of Personality and Social Psychology, 99,
52–61.
Diener, E., Tay, L., & Oishi, S. (2013). Rising income and the
subjective well-being of nations. Journal of Personality and
Social Psychology, 104, 267–276.
Dunn, E. W., Aknin, L. B., & Norton, M. I. (2008). Spending
money on others promotes happiness. Science, 319, 1687–
1688.
by Lara Aknin on February 5, 2014cdp.sagepub.comDownloaded from

Prosocial Spending and Happiness 47
Dunn, E. W., Ashton-James, C., Hanson, M. D., & Aknin, L. B.
(2010). On the costs of self-interested economic behavior:
How does stinginess get under the skin? Journal of Health
Psychology, 15, 627–633.
Dunn, E., & Norton, M. (2013). Happy money: The science of
smarter spending. New York, NY: Simon & Schuster.
Gray, K. (2010). Moral transformation: Good and evil turn the
weak into the mighty. Social Psychological and Personality
Science, 1, 253–258.
Harbaugh, W. T., Mayr, U., & Burghart, D. R. (2007). Neural
responses to taxation and voluntary giving reveal motives
for charitable donations. Science, 316, 1622–1625.
Kahneman, D., Krueger, A. B., Schkade, D., Schwarz, N., &
Stone, A. A. (2006). Would you be happier if you were
richer? A focusing illusion. Science, 312, 1908–1910.
Lamberton, C. P. (2013). A spoonful of choice: How allocation
increases satisfaction with tax payments. Journal of Public
Policy and Marketing, 32, 223–238.
Moll, J., Krueger, F., Zahn, R., Pardini, M., de Oliveira-Souza, R.,
& Grafman, J. (2006). Human fronto–mesolimbic networks
guide decisions about charitable donation. Proceedings
of the National Academy of Sciences, USA, 103, 15623–
15628.
Thoits, P. A., & Hewitt, L. N. (2001). Volunteer work and
well-being. Journal of Health and Social Behavior, 42,
115–131.
Vohs, K. D., Mead, N. L., & Goode, M. R. (2006). The psycho-
logical consequences of money. Science, 314, 1154–1156.
Weinstein, N., & Ryan, R. M. (2010). When helping helps:
Autonomous motivation for prosocial behavior and its influ-
ence on well-being for the helper and recipient. Journal of
Personality and Social Psychology, 98, 222–244.
Zaki, J., & Mitchell, J. P. (2011). Equitable decision mak-
ing is associated with neural markers of intrinsic value.
Proceedings of the National Academy of Sciences, USA, 108,
19761–19766.
by Lara Aknin on February 5, 2014cdp.sagepub.comDownloaded from