Norton studied how spending money can influence happiness. Based on the video, how did Norton conduct his research? Describe the results of his study, including how the ways people spend money influence their happiness.

Norton said, "If you think money cannot buy happiness, you're not spending it right." What did Norton mean by this and why do you think spending money on others makes people happier?

Answers with Explanations:

1. Based on the video, how did Norton conduct his research? Describe the results of his study, including how the ways people spend money influence their happiness?

Michael Norton conducted his research through a "natural experiment." He focused on making people "pro-social" about money, rather than antisocial. They ventured into a campus in Vancouver and asked people to join their experiment. Those who agreed were given an envelop of money and were asked to spend it by 5 p. m. They could spend it "personally" for their bills, expenses and gifts for themselves or they could spend it pro-socially, such as donating to charity and the like. The result showed various differences with most people choosing to buy "Starbucks" coffee. Some people bought coffee for themselves while others bought coffee for others. They found out that people who spent the money on others got happier while those who spent it for themselves didn't really feel the same amount of happiness.

The amount of money also didn't matter. They also did similar experiments in Uganda and California and still came up with similarities in results. Spending even just a small amount of money on others can make people happy.

2. Norton said, "If you think money cannot buy happiness, you're not spending it right." What did Norton mean by this and why do you think spending money on others makes people happier?

According to Norton, money spent on ourselves doesn't make us happy. He based his research on a CNN article entitled "Winning the lottery: Does it guarantee happiness?" The articled focused on how the lives of people were ruined after winning the lottery. He considered the comments of the people and noticed that most of people's comments led to being "anti-social" as they fantasized about winning the lottery. For example, one commented that if he were to win the lottery, he'd buy a mountain and build a house on top. Clearly, his home will be far from the community of people. It made people more selfish and destroyed social relationships because friends, relatives and the like will often bug them or ask them for money.

Spending money on others gives a bigger return than spending it on ourselves. Thus, it is important to give to other people no matter how inexpensive it may be.