Common sense says that we are happier when we get more money to spend on ourselves. At least, that’s what passes for commonsense in modern capitalistic societies, from the United States to China. Indeed, when Elizabeth Dunn and colleagues at the University of British Columbia and at Harvard Business School asked a bunch of their students (the usual subjects in social science studies), that’s exactly what they found: students thought they would be happier getting $20 than $5, and that they would be happier spending the money on themselves than on others.
Turns out, the students were spectacularly wrong.
Research over the past several years has steadily contradicted the capitalistic assumption about human nature. For instance, it is well known that there is only a weak correlation between income level and self-reported happiness across the globe, with the relationship plateauing (meaning that additional money does not increase happiness) at surprisingly low levels of income. And yet, people keep playing the lottery, or its white collar equivalent, the stock market. Why?