Richer people are more than happy to spend money on experiences, but this doesn’t apply to lower-income people. They feel the same or are happier when they buy material goods rather than experiences, a new study showed.
The research raises questions about the view purported by millennials – that spending on experiences is what makes people truly happy, while buying possessions gives short-lived pleasure. In fact, buying a weekend trip or concert tickets might not result in greater happiness than buying a new computer or dress.
Researchers say this view is over-simplified and does not take the huge economic disparities between people into account. One reason richer people may prefer spending on experiences over possessions is that they already have enough material things. They can invest money in vacations that the vast majority of middle-class people can’t afford.
Lower-income persons might find more value in possessions because of their practical advantages and the fact that they generally last longer than a weekend trip would – or any experience for that matter.
A study from the Ulsan National Institute of Science and Technology in South Korea, the University of Southern California, and Arizona State University analyzed college students at public and private colleges. The researchers found that students at public schools with lower tuition costs were less keen on experiences than students with higher tuition costs at private colleges.
In a follow-up study, individuals in the lower income bracket reported material purchases making them happier, while higher-income individuals favored experiences. Participants with a higher education degree and an annual household income of $80,000 preferred spending money on experiences.
