Want more happiness and life satisfaction? Then consider spending more of your money on experiences instead of consumer goods.
So says Thomas Gilovich, Professor of Psychology at Cornell University. He is the author of highly cited papers on human biases and heuristics and has written several books on the topic, notably “How We Know What Isn’t So: The Fallibility of Human Reason in Everyday Life.”
Experiences generate a greater satisfaction leading to long-standing positive memories. Consumption of goods such as televisions, houses and cars run into the problem of human adaptability. We have an amazing ability to adjust to circumstances, both good and bad. Pleasure derived from an increase in the size or quality attenuates. What was once a “new and bigger house” eventually becomes just “the house.” Alternatively, experiences tend to change who you are as person, connect you to other people, which provides more enduring life satisfaction and enjoyment.
Gilovich first came to public notice when he co-authored a paper on Basketball’s “Hot Hand” with Amos Teversky. They statistically demonstrated it was a myth, which sent the sport into a tizzy.
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Next week, we speak with Constance Hunter, Chief Economist at KPMG.