Experiences Versus Things

Why spending on experiences often brings more lasting happiness than spending on material possessions, and the important exceptions to that rule.

Imagine you have 5,000 rupees to spend on yourself. You could buy a new pair of headphones or spend it on a day trip with friends. Which would make you happier? A body of research suggests that, on average, an experiential purchase - money spent on doing something, like a trip, a concert or a meal with others - tends to bring more lasting happiness than a material purchase, money spent on having something, like clothes or gadgets.

The research behind the idea

In 2003, psychologists Leaf Van Boven and Thomas Gilovich published a set of studies in which people were asked to recall experiential and material purchases they had made. On average, people reported that their experiential purchases had made them happier and were a better use of money. Many later studies found similar patterns across different age groups and countries.

Why experiences may last longer

Researchers have suggested several reasons:

First, experiences are slower to fade. Possessions sit in front of us every day, which makes hedonic adaptation fast; the new phone quickly becomes just “my phone.” Experiences end, so we adapt to them less, and memories of them often grow fonder with time as we forget the small annoyances.

Second, experiences become part of who we are. People are more likely to describe a trip, a performance they attended, or a course they took as part of their identity than a possession.

Third, experiences are often shared. Many involve other people, and social connection is one of the strongest drivers of wellbeing. Experiences also give us stories to tell, which brings further conversation and connection.

Fourth, experiences are harder to compare. It is easy to notice that a friend’s phone is newer than yours; it is harder to rank your family holiday against theirs. This reduces the sting of social comparison.

Finally, the anticipation of an experience - looking forward to it - tends to be more enjoyable than waiting for a possession, which is often accompanied by impatience.

Two ways to spend a birthday gift

Ananya receives 3,000 rupees for her birthday. She considers a new jacket, but instead uses the money for a weekend cooking class with her cousin. She spends two weeks looking forward to it, enjoys learning alongside her cousin, and months later they still talk about the dish they burned on the first attempt. The jacket would have been useful, but research suggests the shared experience is more likely to keep adding to her happiness over time.

Important exceptions

The pattern is an average, not a rule. Some research suggests the advantage of experiences is smaller or disappears for people with lower incomes, for whom a reliable material purchase - a working refrigerator, a sturdy pair of shoes, a phone that connects them to work - can bring real and lasting benefits. Material goods that enable experiences, like a bicycle, a musical instrument, or assistive technology such as a screen reader or refreshable braille display, blur the line entirely; their value lies in what they let people do. And experiences that go badly, or that are chosen mainly to impress others online, may not bring the same benefits.

Assuming every expensive experience beats every possession

It is a mistake to conclude that any costly holiday is better than any useful object. The research compares typical purchases, and it matters whether the purchase meets a real need, whether it involves other people, and whether you can afford it without stress. An experience bought with debt can easily undo its own benefits.

Key takeaways

On average, experiential purchases bring more lasting happiness than material purchases.
Experiences fade more slowly, shape identity, are often shared, and are harder to compare.
Anticipation of an experience adds to its value.
For people with less money, and for goods that enable activities, material purchases can be just as valuable.