Excerpted from an article, Spending Money on Others Promotes Happiness, that appeared in the journal Science this past month:
A large body of research has demonstrated that income has a reliable, but surprisingly weak, effect on happiness within nations, particularly once basic needs are met. Indeed, although real incomes have surged dramatically in recent decades, happiness levels have remained largely flat within developed countries across time. One of the most intriguing explanations for this counterintuitive finding is that people often pour their increased wealth into pursuits that provide little in the way of lasting happiness, such as purchasing costly consumer goods.
We suggest that investing income in others rather than oneself may have measurable benefits for one's own happiness.
As an initial test of the relation between spending choices and happiness, we asked a nationally representative sample of 632 Americans (55% female) to rate their general happiness, to report their annual income, and to estimate how much they spent in a typical month on (i) bills and expenses, (ii) gifts for themselves, (iii) gifts for others, and (iv) donations to charity. The first two categories were summed to create an index of personal spending, and the latter two categories were summed to create an index of pro-social spending. Entering the personal and pro-social spending indices simultaneously into a regression predicting general happiness revealed that personal spending was unrelated to happiness, but higher pro-social spending was associated with significantly greater happiness.
If this interpretation is correct, then people who receive an economic windfall should experience greater happiness after receiving the windfall if they spend it on others rather than themselves. We tested this prediction by examining the happiness of 16 employees before and after they received a profit-sharing bonus from their company. [The] employees who devoted more of their bonus to pro-social spending experienced greater happiness after receiving the bonus, and the manner in which they spent that bonus was a more important predictor of their happiness than the size of the bonus itself.
Finally, despite the observable benefits of pro-social spending, our participants spent relatively little of their income on pro-social ends; participants in our national survey, for example, reported devoting more than 10 times as much money for personal as for pro-social spending each month. Although personal spending is of necessity likely to exceed pro-social spending for most North Americans, our findings suggest that very minor alterations in spending allocations—as little as $5 in our final study—may be sufficient to produce nontrivial gains in happiness on a given day. Why, then, don't people make these small changes? Tests revealed that participants were doubly wrong about the impact of money on happiness; we found that a significant majority thought that personal spending would make them happier than pro-social spending and that $20 would make them happier than $5.
G‑d spoke to Moses saying: "Speak to the children of Israel, and have them take for Me an offering..."—Exodus 25:1-2.
Our sages have pointed out the curious wording of this command: should not G‑d have instructed the Israelites to give an offering, rather than to take one?
But the precise wording teaches us that when we give a charitable contribution we are actually taking more than giving. In the words of the Midrash (Midrash Rabbah Leviticus 34): "More than the benefactor benefits the pauper, the pauper benefits the benefactor."
G‑d created the world based on a system of rules that He conjured. These rules encompass all of creation—both its matter and its spirit. Many of these rules are of the cause-and-effect variety. You throw a ball in the air, it will come down. You plant a seed, a plant will grow. You forget your wife's birthday, all sorts of bad things happen. You give charity, and you end up getting.
In His kindness, he gave us creation's master blueprint, the Torah, which contains all the rules—whether explicitly or encrypted.
Some of these rules are intuitive, some are not. Sometimes it takes a scientific study to empirically demonstrate the truth of one of these rules.
Who knows? Maybe the next study will confirm that closing one's business on Shabbat actually increases revenue...