EFTA00298178.pdf

Provided for non-commercial research and education use. Not for reproduction, distribution or commercial use. nant 2I lot 2011 *SNP:4410S Journal of CONSUMER PSYCHOLOGY The Official Journal of The Society for Consumer Psychology fe...1••• IN...A AS.. ImOIN -NEI • OM. b•NII CININ• MO LIP IN•MNI. MN•Ni••• •=1 ••••••• This article appeared in a journal published by Elsevier. The attached copy is furnished to the author for internal non-commercial research and education use, including for instruction at the authors institution and sharing with colleagues. Other uses, including reproduction and distribution, or selling or licensing copies, or posting to personal, institutional or third party websites are prohibited. In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier's archiving and manuscript policies are encouraged to visit: EFTA00298178  :Author's percr Available online al Journal of CONSUMER .•;' ScienceDirect PSYCHOLOGY Journal of Consumer Psychology 21 (2011) 115-125 Research Dialogue If money doesn't make you happy, then you probably aren't spending it right b, Elizabeth W. Dunn a' *, Daniel T. Gilbert I , Timothy D. Wilson ca • University ofBritish Columbia, Douglas Kenny Building, Room 2013, 2136 West Malt Vancouver. British Columbia, Canada V6T 1Z4 b Department ofPsychology. Harvard Uniwrsit illiant James Halt Cambridge. MA 02138, USA Department ofPsychology. University of Virginia, Box 400400. Charlottesville, VA 22904-4400, USA M. Received 16 July 2010 Available online 21 March 2011 Abstract The relationship between money and happiness is surprisingly weak, which may stem in part from the way people spend it. Drawing on empirical research, we propose eight principles designed to help consumers get more happiness for their money. Specifically, we suggest that consumers should (1) buy more experiences and fewer material goods; (2) use their money to benefit others rather than themselves; (3) buy many small pleasures rather than fewer large ones; (4) eschew extended warranties and other forms of overpriced insurance; (5) delay consumption; (6) consider how peripheral features of their purchases may affect their day-today lives; (7) beware of comparison shopping; and (8) pay close attention to the happiness of others. O 2011 Society for Consumer Psychology. Published by Elsevier Inc. All rights reserved. Scientists have studied the relationship between money and nutrition and better medical care, more free time and more happiness for decades and their conclusion is clear: Money buys meaningful labor—more of just about every ingredient in the happiness, but it buys less than most people think (Aknin, recipe for a happy life. And yet, they aren't that much happier Norton, & Dunn, 2009; Diener & Biswas-Diener, 2002; Frey & than those who have less. If money can buy happiness, then why Stutzer, 2000). The correlation between income and happiness doesn't it? is positive but modest, and this fact should puzzle us more than Because people don't spend it right. Most people don't know it does. After all, money allows people to do what they please, the basic scientific facts about happiness—about what brings it so shouldn't they be pleased when they spend it? Why don't a and what sustains it—and so they don't know how to use their whole lot more money make us a whole lot more happy? One money to acquire it. It is not surprising when wealthy people answer to this question is that the things that bring happiness who know nothing about wine end up with cellars that aren't simply aren't for sale. This sentiment is lovely, popular, and that much better stocked than their neighbors', and it should not almost certainly wrong. Money allows people to live longer and be surprising when wealthy people who know nothing about healthier lives, to buffer themselves against worry and harm, to happiness end up with lives that aren't that much happier than have leisure time to spend with friends and family, and to anyone else's. Money is an opportunity for happiness, but it is control the nature of their daily activities—all of which are an opportunity that people routinely squander because the sources of happiness (Smith, Langa, Kabeto, & Ubel, 2005). things they think will make them happy often don't. Wealthy people don't just have better toys; they have better When people make predictions about the hedonic conse- quences of future events they are said to be making affective forecasts, and a sizeable literature shows that these forecasts are often wrong (for reviews see Gilbert & Wilson, 2007, 2009; • Corresponding author. E-mail address: edunn®psych.ubc.ca (E.W. Dunn). Wilson & Gilbert, 2003). Errors in affective forecasting can be I Fax: +1 617 495 3892. traced to two basic sources. First, people's mental simulations 2 Fax: +1 434 982 4766. of future events are almost always imperfect. For example, 1057-74085 - sec front matter C 2011 Society for Consumer Psychology. Published by Elsevier Inc. All rights reserved. doi:10.10161j.jcps.2011.02.002 EFTA00298179  Author's personal copy 116 E.W. Dunn ei at /Journal of Consumer Psychology 21 (2011) 115-125 people don't anticipate the ease with which they will adapt the fact that they are engaged in it (Csikszentmihalyi, 1999). to positive and negative events, they don't fully understand Fig. 1 shows the results of a large-scale experience-sampling the factors that speed or slow that adaptation, and they are study in which people reported their current happiness, their insufficiently sensitive to the fact that mental simulations current activity, and the current focus of their thoughts lack important details. Second, context exerts strong effects on (Killingsworth & Gilbert, 2010). The upper half of the figure affective forecasts and on affective experiences, but people shows the average amount of happiness that people reported often fail to realize that these two contexts are not the same; that while doing their daily activities, and although the difference is, the context in which they are making their forecasts is not the between the most and least pleasant activities is real and context in which they will be having their experience. These significant, it is also surprisingly small. In contrast, the bottom two sources of error cause people to mispredict what will half of Fig. 1 shows the average amount of happiness that make them happy, how happy it will make them, and how people reported when their minds were focused on their current long that happiness will last. activity, and also when their minds were wandering to pleasant, In this article, we will use insights gleaned from the affective neutral, or unpleasant topics. As the figure shows, people were forecasting literature to explain why people often spend money maximally happy when they were thinking about what they in ways that fail to maximize their happiness, and we will offer were doing, and time-lag analyses revealed that mind- tight principles that are meant to remedy that. wandering was a cause, and not merely an effect, of diminished happiness. A wandering mind is an unhappy mind, and one of Principle I: Buy experiences instead of things the benefits of experiences is that they keep us focused on the here and now. "Go out and buy yourself something nice." That's the Experiences are good; but why are they better than things? consoling advice we often give to friends who have just gotten One reason is that we adapt to things so quickly. After devoting bad news from their employer, their doctor, or their soon-to-be- days to selecting the perfect hardwood floor to install in a new ex spouse. Although the advice is well-meant, research suggests that people arc often happier when they spend their money on experiences rather than things. restweep • Van Boven and Gilovich (2003) defined experiential pur- wen..,9 • chases as those "made with the primary intention of acquiring a life experience: an event or series of events that one lives home compute( • through," while defining material purchases as those "made •commuting. traveling with the primary intention of acquiring a material good: grooming. sell care • _ istening to radio. news a tangible object that is kept in one's possession" (p. 1194). meanqp Although there is a "fuzzy boundary" between these two types • doing housework watching television • of purchases, with many purchases (e.g., a new car) falling • reading somewhere in the hazy middle, consumers are consistently able relaxing, nothing speclal • to describe past purchases that clearly fit these definitions, • taking we of your children *hoping, wands • both in their own minds and the minds of coders trained in ptepanng toad • - this distinction (Carter & Gilovich, 2010, p. 156). In one study, AFrarr9tworShihhin9Meeeelino wing these definitions were presented to a nationwide sample of over wallung, taking a we& • • listening' to music Writ • a thousand Americans, who were asked to think of a material • talking conversation and an experiential purchase they had made with the intention 'serving • making of increasing their own happiness. Asked which of the two lace purchases made them happier, fully 57% of respondents reported that they had derived greater happiness from their io unpleasant mind wandering experiential purchase, while only 34% reported greater • neutral mind wandering happiness from their material purchase. Similar results emerged • pleasant mind wandering using a between-subjects design in which participants were randomly assigned to reflect on either a material or experiential purchase they had made; individuals experienced elevated mood when contemplating a past experiential purchase (relative ill not mind wandering to those contemplating a past material purchase), suggesting 3$ 5I6 es 75 65 95 that experiential purchases produce more lasting hedonic benefits. There is no doubt that some experiences are better than Fig. 1. From Killingsworth & Gilbert (2010). Upper half shows mean centered others: people report being happier when they are making love happiness reported by people who were doing each activity. Bottom half shows or listening to music, for example, than when they are working mean centered happiness tenoned by people whose minds were wandering to or commuting. But when it comes to happiness, the nature of the unpleasant topics, or neutral topics, pleasant topics, or whose minds where not activity in which people are engaged seems to matter less than mind wandering. Bubble size indicates the number of reports. EFTA00298180  Author's personal copy E. W. Dunn el at / Journal of consumer Psychology 21 (2011) 115-125 117 condo, homebuyers find their once beloved Brazilian cherry rats) construct social networks as complex as ours, and we are floors quickly become nothing more than the unnoticed ground the only one whose complex social networks include unrelated beneath their feet. In contrast, their memory of seeing a baby individuals. Many scientists believe that this "hypersociality" cheetah at dawn on an African safari continues to provide is what caused our brains to triple in size in just 2 million years delight. Testing this idea in an experimental context, Nicolao, (Dunbar & Shultz, 2007). Given how deeply and profoundly Irwin, and Goodman (2009) randomly assigned participants social we are, it isn't any wonder that the quality of our social to spend several dollars on either a material or experiential relationships is a strong determinant of our happiness. purchase, tracking participants' happiness with their purchase Because of this, almost anything we do to improve our con- over a 2 week period. Over time, participants exhibited slower nections with others tends to improve our happiness as well— adaptation to experiential purchases than to material purchases.3 and that includes spending money. Dunn, Aknin, and Norton One reason why this happens is that people adapt most quickly (2008) asked a nationally representative sample of Americans to that which doesn't change. Whereas cherry floorboards to rate their happiness and to report how much money they generally have the same size, shape, and color on the last day spent in a typical month on (1) bills and expenses, (2) gifts for of the year as they did on the first, each session of a year-long themselves, (3) gifts for others, and (4) donations to charity. The cooking class is different from the one before. first two categories were summed to create a personal spending Another reason why people seem to get more happiness composite, and the latter two categories were summed to create from experiences than things is that they anticipate and remember a prosocial spending composite. Although personal spending the former more often than the latter. Surveying a sample of was unrelated to happiness, people who devoted more money Cornell students, Van Boven and Gilovich (2003) found that 83% to prosocial spending were happier, even after controlling for reported "mentally revisiting" their experiential purchases more their income. An experiment revealed a similar pattern ofresults frequently than their material purchases (p. 1199). Things bring us (Dunn, Aknin, & Norton, 2008). Researchers approached happiness when we use them, but not so much when we merely individuals on the University of British Columbia (UBC) think about them. Experiences bring happiness in both cases— campus, handed them a $5 or $20 bill, and then randomly and some (e.g., climbing a mountain or making love to a new assigned them to spend the money on themselves or on others partner) may even be better contemplated than consummated by the end of the day. When participants were contacted (Loewenstein, 1999). We are more likely to mentally revisit our that evening, individuals who had been assigned to spend experiences than our things in part because our experiences their windfall on others were happier than those who had been are more centrally connected to our identities. In a survey of 76 assigned to spend the money on themselves. The benefits adults, Van Boven and Gilovich (2003) found that the vast of prosocial spending appear to be cross•cultural. Over 600 majority of adults viewed their experiential purchases as more students attending universities in Canada and in the East self-defining than their material purchases. What's more, because African nation of Uganda were randomly assigned to reflect on experiences often seem as unique as the people who are having a time they had spent money on themselves or on others (Aknin them, it can be difficult to compare the butt-numbing bicycle ride et al., 2010). Participants felt significantly happier when they we decided to take through the Canadian Arctic to the sunny reflected on a time they had spent money on others, and this Sonoma wine tour we could have taken instead—thereby saving effect emerged consistently across these vastly different cultural us from troubling ruminations about the road less travelled (Carter contexts—even though the specific ways in which participants & Gilovich, 2010). As such, it is possible to reduce our proclivity spent their money varied dramatically between cultures.° The for making these kinds of distressing comparisons simply by emotional rewards of prosocial spending are also detectable thinking of our purchases in experiential terms; if we view a new at the neural level. Participants in an MRI were given the car not as something we have, but as something that expands what opportunity to donate money to a local food bank. Choosing we can do, then discovering that a shinier, faster, less expensive to give money away—or even being forced to do so—led to model has just come out may be a little less frustrating (Carter & activation in brain areas typically associated with receiving Gilovich, 2010). A final reason why experiences make us happier rewards (Harbaugh, Mayr, & Burghart, 2007). than things is that experiences are more likely to be shared with Why does prosocial spending produce such strong and other people, and other people—as we are now about to see—are consistent benefits for well-being? Diener and Seligman (2002) our greatest source of happiness. argue that strong social relationships are universally critical for happiness, and prosocial spending has a surprisingly powerful impact on social relationships. Research shows that receiving a gift Principle 2: Help others instead of yourself from a romantic partner has a significant impact on college students' feelings about the likelihood that the relationship Human beings are the most social animal on our planet. Only will continue over the long-term and lead to marriage (Dunn, three other animals (termites, eusocial insects, and naked mole Huntsinger, Lun, & Sinclair, 2008). Spendingmoney on a fiend or 3 Of course, if people adapt more slowly to experiential than material purchases, then they may also experience more lasting distress from a terrible 4 Providing evidence that the benefits of prosocial spending emerge experiential (versus material purchase). Indeed. Nicolao ct al. (2009) found regardless of whether purchases arc material or experiential, the effect of suggestive evidence that experience purchases that turn out badly may produce prosocial spending remained significant even when controlling for the extent to somewhat more lasting unhappiness than material purchases that turn out badly. which the purchase was material versus experiential. EFTA00298181  Author's personal copy 118 Ell'. Dunn ei at. /Journal of Consumer Psychology 21 (2011) 115-125 romantic partner also provides an opportunity for positive self- changing). Each of these variables makes an event harder to presentation, which has been shown to produce benefits for mood understand and as a result we pay more attention to it and adapt (Dunn, Biesanz, Human, & Finn, 2007). Giving to charity may more slowly. And, small pleasures are more likely to satisfy facilitate such positive self-presentation as well, and may even these conditions than are large ones. Having a beer after work facilitate the development of social relationships, considering that with friends, for example, is never exactly the same as it was most charitable donations are made by individuals who are directly before; this week the bar had a new India Pale Ale from Oregon connected to the beneficiaries (e.g., churches, arts organizations; on tap, and Sam brought along his new friend Kate who told a Schervish & Szanto, 2006). funny story about dachshunds. If we buy an expensive dining Although the benefits ofprosocial spending are robust across room table, on the other hand, it's pretty much the same cultures and methodologies, they are invisible to many people. table today as it was last week. Because frequent small pleasures Surveying UBC students, Dunn et al. (2008) found that a are different each time they occur, they forestall adaptation. significant majority made an affective forecasting error they Another advantage of small pleasures is that they are less thought that spending money on themselves would make them susceptible to diminishing marginal utility, which refers to the happier than spending on others. Indeed, simply thinking about fact that each unit increase in the magnitude of a pleasure money has been shown to undermine prosocial impulses, increases the hedonic impact of that pleasure by a smaller making people less likely to donate to charity or help acquain- amount than did the previous unit increase. Eating a 12 oz cookie tances (Vohs, Meade, & Goode, 2006). Although money can is not twice as pleasurable as eating a 6 oz cookie because and should promote happiness, the mere thought ofmoney may the first X% of a cookie's weight accounts for more than X% undermine its ability to do so. of its hedonic impact. People can therefore offset diminishing marginal utility by "breaking up" or "segregating" a pleasurable Principle 3: Buy many small pleasures instead of few experience such as cookie-eating into a series of briefer big ones experiences (Kahneman, 1999; Kahneman & Tversky, 1979; Mellers, 2000; Thaler, 1999). Eating two 6 oz cookies on dif- Adaptation is a little bit like death: we fear it, fight it, and ferent days may be better than eating a 12 oz cookie at a single sometimes forestall it, but in the end, we always lose. And like sitting. Research shows that people have some understanding of death, there may be benefits to accepting its inevitability. If we this principle, which is why they prefer to win a S25 lottery and inevitably adapt to the greatest delights that money can buy, then later to win a $50 lottery than to win a single $75 lottery than it may be better to indulge in a variety of frequent, small (Thaler, 1985, 1999; Thaler & Johnson, 1990). The same is true pleasures—double lanes, uptown pedicures, and high thread- for non-monetary experiences such as eating chocolate, getting count socks— rather than pouring money into large purchases, good grades, and exchanging social pleasantries (Linville & such as sports cars, dream vacations, and front-row concert Fischer, 1991; Morewedge, Gilbert, Keysar, Berkovitz, & tickets. This is not to say that there's anything wrong with large Wilson, 2007). purchases. But as long as money is limited by its failure to grow But why does segregation work? One reason is that it intro- on trees, we may be better off devoting ow finite financial duces a temporal discontinuity between experiences and thus resources to purchasing frequent doses of lovely things rather ameliorates the effects of adaptation. Nelson and Meyvis (2008) than infrequent doses of lovelier things. Indeed, across many asked participants to sit in a chair equipped with a massage different domains, happiness is more strongly associated with cushion. Half the participants experienced a continuous 180 s the frequency than the intensity of people's positive affective massage, while the others experienced a massage of 80 s, experiences (Diener, Sandvik, & Pavot, 1991). For example, no followed by a 20 s break, followed by a another 80 s massage. one finds it surprising that people who have sex are happier than Compared to participants who experienced one longer massage, people who don't (Blanchflower & Oswald, 2004), but some do those who experienced two briefer massages (interrupted by a find it surprising that the optimal number of sexual partners to break) found the overall experience more pleasurable and were have in a 12-month period is one. Why would people who willing to pay about twice as much to purchase the massage have one partner be happier than people who have many? One cushion. Before the massage began, however, the majority of reason is that multiple partners are occasionally thrilling, but participants made affective forecasting errors: they predicted regular partners are regularly enjoyable. A bi-weekly ride on a that they would prefer receiving one continuous massage rather merry-go-round may be better than an annual ride on a roller than two shorter massages with a break in the middle. This coaster. study highlights the surprising speed with which adaptation can One reason why small frequent pleasures beat infrequent occur; afler just 80 s, participants had presumably acclimated to large ones is that we are less likely to adapt to the former. The the pleasure of the massage, which was renewed when it was more easily people can understand and explain an event, the stopped and then begun again. Thus, by treating themselves to quicker they adapt to it (Wilson & Gilbert, 2008), and thus frequent, fleeting pleasures (rather than more sporadic but anything that makes a pleasurable event more difficult to prolonged experiences), consumers can capitalize on the burst understand and explain will delay adaptation. These variables of delight that accompanies the first minute ofmassage, the first include novelty (we've never experienced the event before), bite of chocolate cake, and the first sight of the sea. surprise (we didn't expect it to happen), uncertainty (we're not The happiness provided by frequent small pleasures helps entirely sure what the event is), and variability (the event keeps make sense of the modest correlation between money and EFTA00298182  Author's personal copy E. W. Dunn ei at / Journal ofConsumer Psychology 21 (2011) 115-125 119 happiness. In a study of Belgian adults, individuals who had a against the loss of consumer goods may be unnecessary strong capacity to savor the mundane joys of daily life were emotional protection. happier than those who did not (Quoidbach, Dunn, Petrides, & The psychological immune system also provides the key to Mikolajczak, 2010). This capacity to savor, however, was understanding a phrase uttered by embattled politicians, reality reduced among wealthy individuals. Indeed, the positive impact show rejects, and Olympic athletes who just missed the podium: of wealth on happiness was significantly undercut by the "I have no regrets." When former British Prime Minister Tony negative impact of wealth on savoring. Quoidbach et al. (2010) Blair invoked this familiar refrain in reference to getting his argue that wealth promises access to peak experiences, which in country involved in the divisive Iraq War, a heckler yelled, turn undermine the ability to savor small pleasures (see also "What, no regrets? Come on!" (The Independent, 2010). Like Parducci, 1995). Indeed, when participants are exposed to the heckler, Blair himself might have found it hard to believe photographs ofmoney (thereby priming the construct of wealth) years ago that he would not regret his actions, had he been able they spend significantly less time eating a piece of chocolate to preview how the future would unfold. The ability to "spin" and exhibit less pleasure while doing it. In short, not only are the events in a positive direction after they have occurred—thereby small pleasures of daily life an important source of happiness, dodging regret—is not limited to politicians. Recent research but unfettered access to peak experiences may actually be demonstrates that ordinary people are remarkably adept at counterproductive. reconstruing events in order to avoid self-blame and the regret that accompanies it, a capacity that these same individuals may Principle 4: Buy less insurance fail to appreciate in prospect. When passengers on a train were asked to estimate how much regret they would feel have felt if If the bad news is that we adapt to good things, the good they had missed the train by 5 minutes or 1 minute, they news is that we adapt to bad things as well. Research on how estimated that they would have felt more regret in the latter case well people cope with a wide variety of traumas and tragedies— than the former. And yet, passengers who had actually missed from heart attacks to terrorist attacks—suggests that people their trains by 1 and 5 min reported remarkably little regret, and are not the emotionally fragile creatures they often imagine equally little regret regardless of whether they had missed the themselves to be (Bonanno, 2004; Ubel, 2006). Just as the train by 5 min or by 1 (Gilbert, Morewedge, Risen, and Wilson, physical immune system wards offmaladies, the "psychological 2004). What explains this discrepancy? When passengers who immune system" wards off malaise by marshalling the had made their trains were asked to imagine having missed them remarkable human capacities of reconstrual and rationalization by a minute, they imagined blaming themselves for the near (Gilbert, 2006). But research suggests that people don't know miss (e.g., "I would not have missed the train if only • woken much about their own psychological immune systems (Gilbert, up earlier and gotten out of the house faster"). Passengers who Pine!, Wilson, Blumberg, & Wheatley, 1998), and as a result had actually missed their trains, however, tended to blame they overestimate their vulnerability to negative affect. anyone or anything but themselves (e.g., "I would have missed Businesses often trade on that ignorance by offering various the train if only all the gates were open instead of just one"). forms of insurance against unhappiness, from extended Because people are highly skilled at dodging self-blame, they warranties to generous return policies. With price tags reaching experience less regret than they predict. as high as 50% of a product's original cost, extended warranties Consumers, of course, often buy with future regret in mind. sold by retailers and manufacturers provide huge benefits to Although they may save a lot of money by purchasing goods the seller and are widely acknowledged to be "bad bets" for through websites such as eBay and Craigslist, they turn to the buyer (Berner, 2004; Chen, Kalra, & Sun, 2009). Why traditional retailers in part because they believe that these stores are consumers willing to pay so much for these overpriced are better equipped to remedy any unhappiness they may warranties? Owning something instantly makes it more experience after the purchase. Little do they know that their delightful (Kahneman, Knetsch, & Thaler, 1990; Morewedge, brains have already come equipped with an unhappiness- Shu, Gilbert, & Wilson, 2009), and as such, a plasma TV that reducing mechanism that they can use for free. After purchasing has just become my plasma TV may seem worthy of protection. a Roomba vacuuming robot on Craigslist that turns out not to The prospect of loss is highly aversive to people, who expect pick up dirt, the psychological immune system enables us to see the pain of losing $5 to exceed the pleasure of gaining $5 what a fabulous dog toy we now own and to appreciate how (Kahneman & Tverslcy, 1979). But research shows that this dirty floors help us "get back to nature." expectation is wrong. Kenner et al. (2006) gave participants $5, Unfortunately, this handy mental mechanism may actually and then flipped a coin. Participants were told that if the coin be short-circuited by generous return policies. Gilbert and Ebert came up one way they would get an additional $5, and if it came (2002) offered participants the choice between prints of up the other way they would lose $3 of their initial endowment. paintings by artists ranging from Van Gogh to El Greco. Although participants expected to be more emotionally affected After participants made their selection, half of them were by the loss of $3 than by the gain of $5, they were not. presented with the equivalent of a generous store return policy: Participants who lost $3 out of their initial $5 endowment were they were told, "If you change your mind about which poster significantly less upset than they expected because they you want to take home before you leave today or even any time instantly framed the event as a $2 gain. Research like this in the next month, you can just let me know and we will suggests that buying expensive extended warranties to guard exchange it for you." The remaining participants were informed EFTA00298183  Author's personal copy 120 EH'. Dunn ei at /Journal of Consumer Psychology 21 (2011) 115-125 that no such exchange would be possible and that their choice viewed the vacation in a more positive light before the was final. Participants who knew they were stuck with the experience than during the experience, suggesting that antici- poster they had chosen responded by inflating their appreciation pation may sometimes provide more pleasure than consumption of it, seeing the poster in a more positive light than they had simply because it is unsullied by reality. Not surprisingly, then, initially. In contrast, participants who knew they could people who devote time to anticipating enjoyable experiences exchange their poster anytime were deprived of this emotional report being happier in general (Bryant, 2003). benefit of commitment and found the poster no more attractive Of course, memory can be a powerful source of happiness than they had before selecting it (see also Frey, 1981; Frey, too, and if anticipation and reminiscence were equal partners in Kumpf, Irle, & Gniech, 1984; Girard, 1968; Jecker, 1964). promoting pleasure then there would be no reason to delay Interestingly, however, participants failed to predict this consumption because each day oflooking forward could simply difference and thought they would be equally happy whether be traded for a day of looking backward. There is reason to they could exchange their poster or not. People seek extended believe, however, that anticipation is the Batman to the Robin of warranties and generous return policies in order to preclude the reminiscence. Research shows that thinking about future events possibility of future regret, but research suggests that the triggers stronger emotions than thinking about the same events warranties may be unnecessary for happiness and the return in the past (Van Boven & Ashworth, 2007; Caruso, Gilbert, & policies may actually undermine it. Wilson, 2008). For example, students felt happier while anticipating an upcoming vacation than while reminiscing Principle 5: Pay now and consume later about the same vacation (Van Boven & Ashworth, 2007) and bought a more expensive thank-you gift for someone who was In 1949, a businessman named Frank McNamara found going to do them a favor than for someone who had already himself without any cash after dining at a New York City done them a favor (Caruso et al., 2008). Just as positive events restaurant. The mortification he experienced as his wife paid the that lie in the future seem better than the same events in the past, bill provided the impetus for him to create one of the earliest negative events that lie in the future appear worse than those in credit cards, establishing the foundation for today's multi- the past. Students wanted more money for a mundane job they billion dollar credit card industry (Gerson & Woolsey, 2009). would do in the future than for one they had already done in the Just as credit card companies allow customers to "consume now past, and mock-jurors awarded more money to an accident and pay later," so do merchants whose offers include phrases victim who was going to suffer for a year than who had already such as "No money down!" and "Don't pay for six months!" suffered for a year (Caruso et al., 2008). Meanwhile, consumers are provided with the chance to satisfy Do people recognize the emotional benefits of delaying their desires faster than ever, instantly downloading music and pleasurable consumption? In some cases they do. Faced with the movies through iTunes or obtaining same-day delivery of choice of when to kiss their favorite celebrity, students in one everything from books to jewelry through Amazon. study were willing to pay more for the kiss to take place 3 days This shift toward immediate enjoyment and delayed payment later rather than 3 hours later (Loewenstein, 1987). Why, then, represents a fundamental change in our economic system that does consumer behavior so often reflect an apparent drive for undermines well-being in two important ways (Thaler & immediate consumption? We suggest that while the future may be Sunstein, 2008). The first and most obvious is that the more emotionally compelling than the past, nothing is as powerful "consume now and pay later" heuristic leads people to engage as the present. Indeed, people exhibit future anhedonia, believing in shortsighted behavior—to rack up debts, to save little for that their emotional responses will be less intense in the future retirement, etc. In the end, the piper must be paid, and when that than in the present (Kassam, Gilbert, Boston, & Wilson, 2008). happens, lives are often ruined. Vast literatures on delay of For example, participants believed that they would experience gratification, intertemporal choice, and delay discounting show more pleasure on the day they received a gift if it were delivered that when people are impatient, they end up less well off today rather than 3 months later. If future feelings really were less (Ainslie & Haslam, 1992; Berns, Laibson, & Loewenstein, intense than present feelings, then one could maximize benefits by 2007; Frederick, Loewenstein, & O'Donoghue, 2003; McClure, consuming in the present (when the pleasure ofconsumption is at Laibson, Loewenstein, & Cohen, 2004; Mischel, Shoda, & its zenith) and paying in the future (when the pain of paying is at Rodriguez, 1989; Soman et al., 2005). its nadir). Of course, future feelings are not less intense than But there is a second reason why "consume now, pay later" is current ones, and thus future anhedonia is an affective forecasting a bad idea: it eliminates anticipation, and anticipation is a source error that causes people to consume immediately and thus miss of "free" happiness. The person who buys a cookie and eats it out on the pleasures of anticipation. right away may get X units of pleasure from it, but the person Delaying consumption provides the benefit of anticipation, who saves the cookie until later gets X units of pleasure when it but it may also promote happiness in two other ways. First, it is eventually eaten plus all the additional pleasure of looking may alter what consumers choose. When people select goods forward to the event. Research shows that people can reap for immediate consumption, they are tempted by "vices," such substantial enjoyment from anticipating an upcoming event as fattening food and lowbrow entertainment, which produce even if the event itself is not entirely enjoyable. Examining three pleasure right away but lack long-term benefits—or even carry different vacations ranging from a trip to Europe to a bicycle trip long-term costs—for well-being (Read & van Leeuwen, 1998; through California, Mitchell et al. (1997) found that people Read, Loewenstein, & Kalyanaraman, 1999). By comparison, EFTA00298184  Author's personal copy E. W. Dunn ei at / Journal ofConsumer Psychology 21 (2011) 115-125 121 delayed consumption is more likely to promote the selection of & Cassar, 2009). The features they highlight as important for "virtues," which produce more lasting (if less immediate) well- their dream cottage include peace and quiet, access to fishing being. For example, when asked to choose a snack from an and boating, and sunset vistas. These are features that are central array that included apples, bananas, paprika-flavored crisps, and to the very essence of a lakeside cottage, and they naturally Snickers bars, people overwhelmingly selected an unhealthy come to mind when people envision owning a vacation home. snack if it was to be consumed immediately, but drifted toward But, taking a broader view, there are many other, less essential the healthier options when selecting a snack to be consumed the aspects ofcottage ownership that are likely to influence owners' following week (Read & van Leeuwen, 1998). Because the happiness, from the mosquitoes buzzing just outside, to the late- present seems to be viewed under an emotional magnifying glass, night calls about a plumbing disaster in the lakeside area, to the people gave in to the temptation of salty, sweet satiation when it long drives back home after a vacation weekend with sleepy was immediately available, but when such satiation receded into children scratching their mosquito bites. Cast in the soft light the future, this temptation no longer loomed large, freeing people of imagination, these unpleasant, inessential det