Pros And Cons Of Pro-Social Spending

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Does pro-social spending increase happiness? Which are moderators, mediators, boundary conditions? “Can't Buy Me Love” is the title of a famous song by The Beatles. But is that really true? Could you maybe buy love or happiness through the right kind of spending? A variety of research has been conducted on the connection between money and happiness. This literature review tries to pick up one subcategory of the money-happiness link: pro-social spending. Pro-social spending can include buying gifts for family or friends or making charitable donations. The findings of the three articles that are going to be reviewed, indicate that pro-social spending does increase happiness but it depends on how close you are to the recipient, whether your…show more content…
They tested this hypothesis in a cross-sectional survey study asking the subjects to report their yearly income, how much they spent on themselves, and how much they spent on others, to create an index of personal and pro-social spending. The participants also gave ratings of their subjective happiness. The researchers found that only social spending and happiness had a significant correlation, whereas personal spending was unrelated to happiness. Dunn et al. (2008) expanded their study on the social spending-happiness link to a longitudinal field study of pro-social spending after receiving a windfall – an unexpected bonus to their regular income. The results showed that the pro-social way of spending on was the only significant predictor of happiness and not the mere size of the bonus. To detect a causal relationship Dunn et al. (2008) conducted an experiment with random assignment. Participants were asked to rate their happiness, and were then given 5$ or 20$ to spend on either themselves or on someone else and after the spending experience asked to rate their happiness again. The results showed that only the subjects in the pro-social spending condition experienced an increase in happiness. All three studies indicate that pro-social spending does indeed have an effect on happiness. But when the researchers asked college…show more content…
The goal of their study was to investigate whether a person's values moderate the relation between social-spending and happiness and to assess if psychological need satisfaction is a mediator in this relationship. Hill and Howell (2014) conducted an online study with 167 American adults. They measured the subject's values, focusing on self-transcendence (values including social justice, unity with nature, equality, helpfulness etc.) and self-enhancement (values including social power, successful, wealth, ambition etc.), and their basic psychological need satisfaction. Furthermore they created an index of personal and pro-social spending, using the same measurements as Dunn et al. (2008). The use of the same measurements among the two articles supports the validity of the studies, at least to the extend that different researchers agree on how to measure pro-social spending. The results show that pro-social spending is indeed a significant predictor of happiness (Hill, Howell 2014), thereby replicating the findings of Dunn et al. (2008). Additionally self-transcendence was identified as a moderator between pro-social spending and happiness, but self-enhancement was not. Thus well-being does not rise through pro-social spending for people low in self-transcendence. Pro-social spending was linked to increased psychological need satisfaction, and psychological

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