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Economics of Happiness and Wellbeing

Volunteering, Giving and Wellbeing

What research shows about how helping others, through volunteering and giving, affects the helper's own happiness.

Economists traditionally assumed that spending money on yourself would make you happiest. Research on prosocial behaviour, acts that benefit others, suggests that helping others can also make the helper happier.

Spending on others

In a well-known experiment published in 2008, Elizabeth Dunn, Lara Aknin and Michael Norton gave participants small sums of money to spend by the end of the day. Those told to spend it on others or give it to charity reported greater happiness than those told to spend it on themselves. Later studies in many countries, including poorer ones, found similar patterns.

The warm glow

Economist James Andreoni described the warm glow: the good feeling people get from giving, beyond caring about the outcome itself. This helps explain why people donate even when their gift makes little difference to the total.

Volunteering

Studies have linked volunteering to higher life satisfaction, better mental health and, among older adults, lower mortality, though researchers note that healthier and happier people may also be more likely to volunteer. Studies using changes in volunteering opportunities suggest some of the effect is causal.

Why helping may help the helper

  • Social connection: volunteering builds relationships.
  • Purpose and meaning.
  • Skills and confidence.
  • Positive feelings from making a difference.

Economic significance

Volunteer work has large economic value, often estimated at a significant share of GDP in many countries if valued at market wages, though it is not counted in GDP. Organisations like EconReads rely on volunteers to create and share learning resources.

A student volunteer

A high school student volunteers to record audio lessons for blind learners. She spends a few hours a week, gains skills in explaining economics and feels she is making a real difference. Research suggests this sense of purpose and connection can raise her own wellbeing, even as it helps others learn.

Thinking helping others is always a sacrifice

Giving time or money has costs, but research suggests it often brings real benefits to the giver as well, through connection, meaning and positive feelings.

Key takeaways
  • Experiments found spending on others makes people happier than spending on themselves.
  • The warm glow describes the good feeling from giving.
  • Volunteering is linked to higher wellbeing and, among older adults, better health.
  • Volunteer work has large economic value that GDP does not count.
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