What to Buy and Why it Matters
By Sterling Hawkins, MSW, LICSW, LCSW-C
Over the years I have become more fascinated with time. How I spend it, what things I value doing with whom, and where and when certain activities take place. In essence, I am reflecting on behavioral economics, which states that people often make choices -- like buying that new Range Rover Sport, gambling or overeating -- that give them the greatest immediate reward at the cost of long-term happiness.
Behavioral Economic Theory suggests people are profoundly influenced by context and have little idea of what they will like or want from one day, one week, or one month to the next. The author James Hamblin based this theory on a 2010 Science paper by Matthew Killingworth and Daniel Gilbert, research psychologists who conducted their research by contacting people as they engaged in their everyday activities and asking them to report their thoughts, feelings and actions in the moment. Killingworth and Gilbert did this by developing a Web application for the iPhone to create a remarkably large database of real-time reports. The application contacts participants through their iPhones at random moments during their waking hours, presents them with questions, and records their answers to a database at www.trackyourhappiness.org
Hamblin, J. [2014] Buy Experiences, Not Things. The Atlantic, Retrieved on 5 June 2019. Available at https https://www.theatlantic.com/business/archive/2014/10/buy-experiences/381132/
Killingsworth, M. & Gilbert, D. Brevia [2010], A Wandering Mind is an Unhappy Mind Retrieved on 21 July 2019. Available at http://www.danielgilbert.com/KILLINGSWORTH%20&%20GILBERT%20(2010).pdf
At the time the paper was released nearly 5000 people, ranging in age from 18 to 88, from 83 different countries, were used collectively to represent 86 occupational categories for the data sample. One of the hypotheses that drives the theory is that living in the moment means avoiding becoming distracted, or the term “wandering,” used by Killingsworth and Gilbert. Wandering signifies individuals’ thoughts shifting in order to attach to something of nostalgic longing. However, this longing, according to the authors, signifies a disappointment or dissatisfaction. Killingsworth and Gilbert suggests that “a wandering mind is an unhappy mind, because minds tend to wander to dark and not whimsical places. Unless that mind has something exciting and sweet to remember.”
Hamblin uses this research to argue that experiences bring people more happiness than do possessions. He suggests that anticipation, when viewed as a driver of happiness, yields a greater psychological return because spending more on experiences provides more enduring happiness which accrues long before the purchase is made. He writes “Waiting for an experience apparently elicits more happiness and excitement than waiting for a material good.” I am experiencing an opportunity to test this theory because I recently sold my old bicycle with hopes of upgrading to a newer one. However, in the process of researching my needs, concluded that I will need to spend more money than I anticipated -- money I don’t currently have, and will need to save to avoid adding to credit card debt.
While I appreciate the beauty and feel of a well-crafted machine, the pleasure associated with the bike is more about the places my bike will take me, once purchased, and the memories I will create riding with others. In short, “Anticipating my experience.” The bike therefore is a means to an end, and not an end in itself.
Hamblin says unlike iPhones, clothes, couches, and other objects, which eventually deteriorate or become obsolete, objects which mainly function to facilitate experience become dear to us because “either they are not around long enough to become imperfect or they are imperfect, but our memories and stories of them get sweet with time.”
Hamblin illustrates this concept by citing two separate scenarios: One, a rained-out beach vacation; and two, a slow MacBook computer. With a rained-out beach vacation, people will construct positive beliefs and attitudes about the event -- for example, playing board games and bonding as a family. In contrast, a slow, malfunctioning computer offers nothing beyond one’s expectations that it will function as designed, and ensuing frustration when it does not.
The implications of this research indicate that we as individuals are incredibly complex creatures, and that behavioral economics can help us understand when and how people make material over experiential purchases, and foster awareness which encourages healthier choices, more conducive to long-term happiness.
The research also suggests that as humans we have trouble exercising self-control. We choose a goal and then frequently act against it because in most cases, we are inconsistent when it comes to differentiating immediate gratification from long-term reward.
Perhaps an integrative approach, utilizing economic terms, is helpful to apply to human behavior. This would involve the use of a metric or multiple decision tools which force us to ask questions about our purchases related to their purpose, use, personal benefit, and collective costs. People tend to lean more toward an integrative approach when the costs are high, as in the purchase of a house or a car, less so when the costs are lower, for example meal or clothing purchases.
One of the ways this research could be expanded is by examining what processes are involved in making experiential purchases versus material purchases, and whether a metric or tool could be used to delay or control for impulse buying to gratify one’s desire in the present, which often leads to unhappiness.
If we are hard-wired to make judgment errors when purchasing things and not experiences, perhaps, through a process of conscious decision-making, we can learn to literally rewire our brains on a more direct path toward true happiness.