Another Look at Money, Happiness, and Time

Despite rising incomes, people around the world are feeling increasingly pressed for time, undermining well-being. We show that the time famine of modern life can be reduced by using money to buy time. Surveys of large, diverse samples from four countries reveal that spending money on time-saving services is linked to greater life satisfaction. To establish causality, we show that working adults report greater happiness after spending money on a time-saving purchase than on a material purchase. (emphasis added) This research reveals a previously unexamined route from wealth to well-being: spending money to buy free time.

Despite this result, the researchers also found that very few people think to spend money this way. Sanford Devoe, a professor at the University of California at Los Angeles who studies the psychological effects of placing a monetary value on time (but was not involved with the study), says that these results add to a growing body of evidence showing that “people don’t spend their money to yield the greatest happiness.”

As for reasons why, there are some possible explanations.

Ashley Whillans, a social psychologist and the study’s lead author, suspects the abstract nature of time may be to blame. She believes that we’re hesitant to trade money, which is concrete and measurable, for time, which is much more uncertain.

Whillans also believes that some people believe that being busy is a status symbol, and so might opt to cut their lawn or clean their house, even if hiring someone else to do such chores might increase a person’s life satisfaction.

I think of this issue in a slightly different way, which is perhaps even more abstract than what Whillans is suggesting as a reason why people may not opt to use their money to have someone else do chores they find unpleasant, or at least more unpleasant than some alternative use of their time.

We’ve never hired someone to cut our lawn or clean our house, and while doing so may increase out short term happiness, I prefer to think of the long term. By doing such chores ourselves, my wife and I can put the money saved towards our retirement. Hopefully by the time we reach retirement, we can then take advantage of our leisure time more effectively because of the extra money we have saved. In addition, I feel that while we are younger and more able, it is easier to do such “unpleasant” tasks, as compared to how we might feel about such tasks when we are older and retired.

Obviously this perspective takes a longer run view of happiness than perhaps the authors, and seems consistent with the notion of the value of delayed gratification.

Of course, my beliefs could change overnight if we were to win the lottery.

If that were to happen, I might even hire someone to do my exercise and math homework for me…

P.S. The story where I found out about this study had an interesting paragraph that referenced a few other studies that looks at the link between money and happiness:

If you look at the many scientific studies on how to buy happiness, you find evidence supporting several other ways. Buying material goods, especially those that match our personality, can satisfy our need for establishing or expressing our identity. Spending money on others “pro-socially” — through charitable giving or to improve relationships with people we care about — fulfills our desire for human connections. And investing in experiences has been repeatedly shown to increase happiness.

P.S.S. And thanks to Dan Pink for posting this story on his Facebook page.