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Here’s a new argument for giving away your money instead of keeping it to yourself: you’ll generate measurably more happiness in the world.
People who received $10,000 cash gifts as part of a global experiment reported noticeable improvements in their well-being, especially if they were of modest means. But even relatively well-off people felt happier after receiving the windfall.
Those are some of the findings from a new study with some unusual elements, including an anonymous donation from a wealthy couple whose identity remains a secret, even to the researchers.
“Our data provide the clearest evidence to date that private citizens can improve net global happiness through voluntary redistribution to those with less,” wrote co-authors Elizabeth Dunn and Ryan Dwyer. Their study, “Wealth Redistribution Promotes Happiness,” was published in the latest edition of the Proceedings of the National Academy of Sciences.
“The study tracked happiness levels among 300 people in seven countries; 200 of them received surprise $10,000 cash gifts and 100 did not. ”
The study tracked happiness levels among 300 people in seven countries; 200 of them received surprise $10,000 cash gifts and 100 did not. People who got the money were instructed to spend it within three months on anything they wanted, though they weren’t allowed to park it in an investment account or use it for illegal activities.
Researchers checked in regularly with all of the participants, including the 100 who did not receive any money, monitoring their “subjective well-being” by asking open-ended interview questions unrelated to the money.
People who received the $10,000 “became significantly more satisfied with life” than the ones who didn’t get the cash, the study found. Recipients maintained their happiness gains through the end of the six-month study, “demonstrating that the cash had enduring benefits for well-being, even several months after the money had been spent,” the authors wrote.
Meanwhile, the people who didn’t get the money saw no change in their happiness levels.
Where cash transfers got the biggest return on investment
The happiness gains were most striking among recipients in lower-income countries. That finding may not sound all that surprising, but the study provided researchers with a unique opportunity to quantify the impact, Dunn said. By assigning point values to participants’ happiness levels, researchers found that the happiness benefit was three times greater for people living in lower-income countries who received the money compared to those in higher-income countries.
That calculation could be helpful for anyone interested in getting the most bang for their buck when they donate, Dunn noted, including followers of “effective altruism” — an evidence-based approach to charitable giving that focuses on making the maximum impact per dollar spent.
“You get a much bigger return on investment from a happiness perspective, a kind emotional ROI, from giving this money in lower-income countries,” Dunn told MarketWatch.
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