Happiness for Sale: Do Experiential Purchases Make Consumers Happier than Material Purchases?

TLDR

Prior theories posit that spending on experiences rather than material goods yields greater happiness. This study tests that claim and finds it may be misleading in general. Happiness depends on outcome valence: positive purchases make experiences more enjoyable, while negative purchases give no advantage—or even less happiness—because people adapt more slowly to experiences.

Abstract

Previous theories have suggested that consumers will be happier if they spend their money on experiences such as travel as opposed to material possessions such as automobiles. We test this experience recommendation and show that it may be misleading in its general form. Valence of the outcome significantly moderates differences in respondents’ reported retrospective happiness with material versus experiential purchases. For purchases that turned out positively, experiential purchases lead to more happiness than do material purchases, as the experience recommendation suggests. However, for purchases that turned out negatively, experiences have no benefit over (and, for some types of consumers, induce significantly less happiness than) material possessions. We provide evidence that this purchase type by valence interaction is driven by the fact that consumers adapt more slowly to experiential purchases than to material purchases, leading to both greater happiness and greater unhappiness for experiential purchases.