Material Possessions Vs Experiential Purchases for Happiness

Abstract

This paper focuses on the previous work on purchase-related happiness. Analyzing numerous studies and experiments of consumer behavior researchers, it aims to explain the author’s main hypothesis: Happiness derived from experiences is higher than the happiness gained by material possessions. Also, the conversational value of experiential purchases is higher than material purchases and this is one of the reasons why individuals gain more hedonic benefits from experiences.

Introduction

Our lives are filled with decisions to be made by us to make our own lives “better” in again our own terms. One of the most complex and challenging decisions is how to spend our money. How much to save every month and how much to spend on our not very basic needs like a new home stereo. This has been one of the greatest dichotomies in people’s everyday lives.

There is a desire to be happier underlying every single decision has been made by individuals. People’s lives can be enriched by redirecting expenditures from things that provide fleeting joy to those that provide more substantial and lasting contributions to well-being (Gilovich & Kumar & Jampol, 2014). When considering the transformation of consumers through purchasing (Mick 2006), it makes sense to consider not only what leads to consumer downfall (debt, drug addiction, etc.) but also what leads to an especially happy life (Nicolao & Irwin & Goodman, 2009). In this article we are going to explore the world of expenditures and their nature. Because, there are some other decisions to be made even after you get through the biggest dichotomy. Yes, you are going to spend some money. As Van Boven and Gilovich (2003) put it, do you prefer “to do” something with that money like going for a ski trip or “to have” something or things like new, shiny jewelry or some designer t-shirts.

We are going to investigate further what underlies people’s decisions on material possessions and experiences. Previous studies show that happiness derived from experiences is higher than the happiness gained by material possessions. This leads us to examine the possible incentives dominating these results. One of the most emphasized reasons according to researchers is the value of the positive social impact generated from a positive experience. As reported by Bastos and Brucks (2017) there is a belief that conversations about experiences are more likely to promote social ties. In other words, a trip to Himalayas or a famous Broadway show is more worthy to tell others than a new Italian home furniture and it will project a positive social image. After mentioning previous researches on expenditure’s role in the pursuit of happiness we are going to analyze the two types of purchases. Finally, we will be able to draw attention to the differential story utility derived from purchases.

Link Between Material Possessions and Happiness

According to consumer behavior researchers, there are two types of goods which consumers project different gains by obtaining. By acquiring hedonic goods, consumers aim for enjoyment. However utilitarian goods are those acquired with intention of achieving practical aims. Consumer choices are driven by utilitarian and hedonic considerations. Consumers choosing among new automobiles, for example, may care about utilitarian features (e.g., gas mileage) as well as about hedonic attributes (e.g., sporty design) (Dhar & Wertenboch, 2000). In Strahilevitz and Myers’ words (1998), hedonic, pleasure-oriented consumption is motivated mainly by the desire for sensual pleasure, fantasy and fun (e.g. a week in the Bahamas). In Western culture, such products are often labeled ‘‘frivolous’’ or ‘‘decadent”. Utilitarian, goal-oriented consumption is motivated mainly by the desire to fill a basic need or accomplish a functional task (e.g., the consumption of a bottle of dishwashing liquid or a box of trash bags). In Western culture, such products are often labeled ‘‘practical’’ or ‘‘necessary”.

This was one of the famous dichotomies those inspired Van Boven and Gilovich in 2003 to examine deeper purchase-related happiness. The second distinction was between the motivations of consumers. Extrinsic goals, which “depend on the contingent reactions of others,” and intrinsic goals, express “desires congruent with actualizing and growth tendencies natural to humans” (Kasser & Ryan, 1996, p. 280). Of course, these distinctions aren’t precise as it is still difficult to identify goods and consumer goals as hedonic or utilitarian and extrinsic or intrinsic. However, they made sense and proved useful to consumer behavior researchers.

Experiential Versus Material Possessions

There has been an ongoing debate around discretionary income and where and how to spend it. From the very early ages philosophers, economists and psychologists claimed their opinions on this matter. Aristotle (4th century B.C.) observed that “…men fancy that external goods are the cause of happiness” but claimed that “leisure of itself gives pleasure and happiness and enjoyment in life” (trans. 1996, pp. 185 and 197). As we get closer to the present day, Hume (1737/1975) and through Scitovsky (1976) and Frank (1985), the sentiment has been that individuals will be happier if they spend their money on experiences (e.g., theater, concerts, and vacations) as opposed to material purchases (e.g., fancy cars, bigger houses, and gadgets) (Nicolao & Irwin & Goodman, 2009). They all declared that experiential purchases make people happier than material purchases. But until Van Boven and Gilovich’s research in 2003 there was no empirical test on this so-called experience recommendation by Nicolao, Irwin and Goodman in 2009.

According to Van Boven and Gilovich it was a challenge to clear cut the distinction between which purchases are considered as experiential and which as material. Nearly everyone would deem a hike in the Himalayas to be an experience and a new Patek-Phillipe watch to be a possession. But what about a flat-screen TV or an automobile? Are they possessions or vehicles for experiences? (Van Boven & Gilovich, 2003). With the help of their experiments and the utility of the general distinction they indicated that experiential purchases are those made with the primary intention of acquiring a life experience: an event or series of events that one lives through. Material purchases are those made with the primary intention of acquiring a material good: a tangible object that is kept in one’s possession.

Van Boven and Gilovich (2003) claimed that materialistic people tend to report lower subjective well-being than nonmaterialistic people. People who strongly agree with such statements as “Some of the most important achievements in life include acquiring material possessions” and “Buying things gives me a lot of pleasure” report lower levels of satisfaction with life than people who disagree with such statements (Belk, 1985; Richins & Dawson, 1992). Thus, whether materialist value material purchase, material purchase can bring them more happiness? Millar and Thomas’ (2009) study shows that materialism regulate the relationship between the type of purchase and happiness: materialistic get more pleasure from material purchase, but for experiential purchase, it does not affect the level of materialism and happiness’ relationship, that is, regardless of the level of materialism, experiential purchase always bring more happiness than material purchase (Zining & Maolin, 2015).

In their research in 2003, Van Boven and Gilovich made 4 experiments those have been the starting point for following researches around this topic. First, they asked their respondents to think about their most recent experiential or material purchase made for more than 100$ and to rate how happy the purchase made them. Also with a following question they asked how they feel about their purchase in that moment. They aimed to figure out if they value experiences more, do they also think that experiences are better investments than material possessions.

As they anticipated, respondents asked to evaluate an experiential purchases claimed higher level of happiness derived from that purchase. They also indicated that experiential purchases are considered “money better spent” and material purchases as “money spent could be better spent elsewhere”. The results also showed them the general understanding for which is being considered as experiences and which as material purchases. There was a very little overlap between the two types of purchase descriptions.

In their second study, they wanted to widen the audience and examine the situation in various demographic groups. As a result, they indicated that reporting that experiences make one happier than possessions is the rule not the exception. That is not to say that there were no demographic differences: Women, younger individuals, and those living in urban or suburban communities were a bit more likely to indicate that experiences made them happier than were men, elderly people, and those living in rural communities (Van Boven & Gilovich, 2003). Then they examined the situation over time, assuming that remembering experiential purchases would make respondents happier than remembering material purchases. The respondents were asked to describe either an experiential or material purchase then they have been asked to come after a week to read their description and ponder their purchase one more time. The results were as anticipated:

Those who experience to remember an experiential purchase claimed higher level of happiness than who experience to remember a material purchase. Some researchers (e.g., Kahneman, 1999) recommend that measures of happiness incorporate not only the valence and intensity of feelings, but also the frequency with which individuals experience those feelings. The results of this experiment indicate that thinking about experiential purchases gives people more pleasure than thinking about material purchases; but do people also think about their experiential purchases more often (Van Boven & Gilovich, 2003)? In the light of this question they made another experiment. This time, respondents were asked which purchase they thought about more often. “A clear majority (83%, 95% confidence interval (71%–94%) indicated that they “mentally revisited” their experiential purchase more often than their material purchase. This suggests that thinking about experiences not only makes people happier than thinking about material possessions, they also think about their experiences more often.”

At this point, Nicolao, Irwin and Goodman (2009) introduced the well-known term in happiness researches hedonic treadmill which is driven by the hedonic adaptation (Frederick and Loewenstein 1999), which refers to the lessening of a hedonic response over time. Better things become less good over time, and worse things become better. They also think that level of hedonic adaption differs with type of (positive) purchase. For instance, Van Boven (2005) surmises that people may tend to adapt faster to material purchases because (positive) experiential purchases remain open to positive reinterpretation (Mitchell et al. 1997). This situation makes the happiness derived from previous experiential purchases to last longer than previous material purchases. This led them to examine more about nature of the purchases. According to them, Van Boven and Gilovich’s findings were only valid for positive purchases but not for negative purchases.

In their research back in 2003 Van Boven and Gilovich asked respondents to describe a positive purchase that they made recently. This time Nicolao, Irwin and Goodman’s questions were more neutral in terms of outcome valence. Results were as anticipated: Experience recommendation was valid for positive purchases as previous studies show. If the purchase did not turn out positively, however, the effect did not hold. Fitting the model for the negative purchases, there was not a significant difference in happiness between experiential and material purchases (Nicolao & Irwin & Goodman, 2009).

So, as a consequence Nicolao, Irwin and Goodman’s (2009) study proved anew that positive experiential purchases lead to a higher level of happiness for consumers than positive material purchases, just like Van Boven and Gilovich’s study showed in 2003. They also found out that for negative purchases the opposite is valid: Negative experiential purchases make consumers unhappier than negative material purchases.

Now if we step back and continue analyzing positive purchases like Van Boven and Gilovich, we can see that there are some reasons behind the experience recommendation those are related to human nature. Van Boven and Gilovich discussed that there were three main causes: Experiences are more open to positive reinterpretation, that they are more central to one’s identity and that they have greater social value. Following researches gathered around this pattern. We would like to discuss the causes of this situation by the theory explanation made by Zining and Ye in 2015.

According to Zining and Ye (2015), the first theory to explain the experience recommendation is the construal level theory (CLT) pointed out that people’s interpretation of events will change with the perception of psychological distance of events such as the time distance, spatial distance. In terms of long psychological distance events, people tend to use high-level construal, that is, characterizing an incident from abstract, core and partial features; as to short psychological distance events, people tend to use low level construal, such as from the concrete, and the surface features to characterize local events (Liberman & Trope, 1998). Briefly, as backed up with Van Boven and Gilovich’s experiments, as time distance increases, experiential purchase has higher level of interpretation than material purchase and it becoming more beautiful, leaving consumers feel happy and joyful (Zining & Ye, 2015).

Zining and Ye (2015) discussed that experiences have a closer contact with self, just like Van Boven and Gilovich (2003). A person’s life is the sum of their life experiences, such as go to school, get married, have kids, etc. Rich life experience creates a colorful life (Van Boven & Gilovich, 2003). Studies also show that people are more likely to introduce and tell about themselves through experiential purchases. They are also more unwilling to forget about their experiences. Thus, experience is closer to individual’s self-concept and self-definition (Dunn et al., 2011).

An important reason for experiential purchase more pleasurable than material purchase is that it is hard to cause social comparison, and also more resistant to unfavorable social comparisons, which can reduce the adverse effects of social comparison, thus, people can get high level of happiness (Carter & Gilovich, 2010, 2014)

According to Zining and Ye (2015), there is a social comparison aspect in experience recommendation. With the help of previous researches they discuss that experiences are less likely to cause social comparison. Because they are personal and unable to unify criteria to compare. Compared to items, experience is more unique, its comparability is relatively small (Carter & Gilovich, 2010). Carter and Gilovich’s study (2010) showed that if respondents were asked to imagine that another companion bought the same product with a better condition and at the same price. In scenario a group of subjects were buying material possessions and the other group was making an experiential purchase. At the end, the group with experiential purchases claimed higher level of happiness than the other. As we mentioned, experiences being unique to one is making it harder to cause a social comparison.

Another study (Van Boven, 2005) also confirmed the above results, the researchers let the subjects to imagine a disappointing experiential purchase or material purchase, subjects who imagine the experiential purchase feel less regret, and are more willing to make similar buying behavior in the future.

According to self-determination theory (SDT), humans have three kinds of inherent basic psychological needs: autonomy need, competency needs and relational needs (Deci & Ryan, 2000). Some researchers believe that why more people feel experience happier than the goods, because the experience and the process itself has undergone sociability, can increase the degree of interpersonal intimacy, is conducive to individual development of success social relationships (Carter & Gilovich, 2014; Van Boven & Gilovich, 2003), better promote one of three kinds of psychological basic needs—relationship need (Zining & Ye, 2015).

Related to people’s psychological needs, experiences are easier to share and to derive a positive social image for the individual. Compared to material purchase, experiential experience easier to share with others, get attention from others, thereby promoting individual pleasure (Bastos, 2012; Van Boven et al., 2010). A final reason that experiences make people happier than possessions is that they are more pleasurable to talk about and they more effectively foster successful social relationships, which are closely associated with happiness (e.g., Diener & Seligman, 2002).

Hedonic Benefits of Experiential and Material Purchases

We human beings are social beings. We come into the world as the result of others’ actions. We survive here in dependence on others. Whether we like it or not, there is hardly a moment of our lives when we do not benefit from others’ activities. For this reason, it is hardly surprising that most of our happiness arises in the context of our relationships with others.

Numerous previous researches claim that humans are highly social creatures (Baumeister & Leary, 1995). This characteristic of human beings effects their everyday life by challenging their decisions. As we discussed earlier in this paper, consumer behavior researchers proved that experiences possess greater hedonic value than material possessions. Again we have analyzed the causes of this experience recommendation. One of the strongest reasons behind it, is people value social relationships the most. In order to enhance their interactions with other people they often tend to share about topics that help them build a positive social image. Communicating about oneself or about something relevant to oneself is a core part of human nature and a ubiquitous behavior (Argo, White, and Dahl 2006; Berger and Schwartz 2011).

At this point, some recent studies test and declare that experiential purchases hold a greater conversational value than material purchases. Conversational value is defined here as the likelihood that the consumer talks about a purchase in a social interaction. Over time, a purchase with high conversational value is talked about more often than a purchase with low conversational value (Bastos & Brucks, 2017). Researchers pointed out the important role of conversational value in experience recommendation. They report that experiences differ from material possessions in some ways: self-narrative provided by closeness to the self, social approval, interest associated with uniqueness. Because of these notions individuals think that telling about experiences can have a more positive impact on their social ties. Conversing with others also enables the teller to gain support and confirmation (Gatignon & Robertson, 1986), helps the teller to learn (Bandura, 1977) and make sense of the shared topic (Finkenauer & Rime, 1998), allows the teller to re-experience the topic (Gable et al., 2004), and prolongs the duration of the topic’s positive effects (Verduyn & Van Mechelen & Tuerlinckx, 2011) (Bastos & Brucks, 2017).

In order to scientifically prove their hypothesis, Bastos and Brucks (2017) made some experiments. In one of them, they asked the subjects to imagine a first connection with a person. A group of subjects were given a text that said they were highly motivated to create a social bond with the other (high-relate group). The second group was the control group so they had a neutral text in terms of relate-motivation condition. The third group was given a text that said they weren’t interested in creating social bonds with the other person (low-relate group).

Results showed that when people are motivated to create a social bond with another person they naturally prefer to tell about an experience they had. If they don’t have any incentives to create a social bond, they become indifferent between telling about a possession or an experience. Control condition participants who chose to share about an object reasoned their choice mostly on the ease of thinking of something to say about the purchase (Bastos & Brucks, 2017).

Kumar and Gilovich (2015), introduced the hedonic adaption into research of the importance of the conversational value. Experiences may suffer less from adaptation in part because they are more likely to prompt, and in turn be enriched by, conversation and storytelling (Kumar & Gilovich, 2015). Talking to others also allows us to re-live experiences long after they have happened. In this sense, experiential purchases are gifts that keep on giving (Kumar & Gilovich, 2015). They also indicate that people are inclined to “better” their stories by telling the most interesting parts sometimes even with distorting the experience a little. Because experiences are more tied to people’s identities, people are also more inclined to distort their experiences in the service of self-esteem maintenance and self-enhancement (Dunning, 2005; Taylor & Brown, 1988). In order to prove their hypothesis, Kumar and Gilovich (2015) made some tests. In one of their experiments, they tested what would happen to subjects’ happiness levels if they weren’t able to speak about a purchase after it has been made. What would upset the more, being unable to talk about a material purchase or an experiential one?

As a result, experiential and material purchases did not differ in price but did differ in how much not being able to talk about them would be bothersome (Kumar & Gilovich, 2015). Respondents claimed that it would bother them more being unable to talk about their experience than being unable to talk about their material possession. This proves that conversational value holds an importance for hedonic benefits derived from a purchase and also that experiential purchases hold a greater storytelling utility than possessions.

In another study, Kumar and Gilovich (2015) examined real life situation in lab environment. This time subjects were asked to come to the lab individually and list 10 of their purchases (5 experiential purchases and 5 material purchases). Then they were asked to record a video and tell about each of their purchases that they’ve listed. By doing so they would be prepared to talk about any of them in details. Then they were asked to tell only about one single purchase they listed.

Results were as anticipated: In the video participants discussed marginally about their experiential purchases than material purchases. Furthermore, when they were asked to choose one single purchase to talk about 80% of the participants chose to speak about an experience. People are thus more likely to choose an experiential purchase to talk about, even when several different material and experiential purchases of each type are readily accessible as potential topics of conversation (Kumar & Gilovich, 2015).

A very similar experiment made by Bastos and Brucks (2017). This time, researchers asked 113 college students to think of two recent purchases they made of each type of purchases; experiential and material and to write them down. Then the students were asked to choose one of their purchases that they’ve listed to converse about them with another person. This experiment demonstrates that when it comes to purchase-related conversations people systematically prefer to converse about an experience they lived through over a material object they own. That almost three-quarters of experiment 3’s sample (i.e., 73%) selected an experience to share indicates the higher conversational value of experiences as compared to that of objects (Bastos & Brucks, 2017).

Yamaguchi et al. (2015), tested the relation between purchases and their influence on social relationships. They asked 1523 Japanese university students about their purchases during the summer break and their post-break levels of happiness. Results show that students who made an experiential purchase during the break indicated higher level of happiness than those who made a luxury material purchase. They also explained their happiness level from social relationships window. So, according to this study, college students give more value to their experiences since they enhance the students’ social ties more than material possessions. Making an experiential purchase contributed to respondents’ greater happiness by positively influencing their social relationships (Yamaguchi et al., 2015).

In these days, people spend a lot of time on social media sharing, liking, commenting or even stalking. Social network sites became the greatest grounds for creating and pursuing social ties. In order to get a deeper sense for experience recommendation and conversational value Lin et al. (2018) examined the effects of experience recommendation on social network sites. They investigated deeper to see if such effect exists on social media as well.

Researchers hypothesized that sharing posts about experiential purchases is more likely to increase liking than sharing material purchases is (Lin et al., 2018). They prepared and online survey that showed the participants a post with an experiential purchase made for 55$ or with a material purchase made for the same amount. Then they asked several questions to participants. To measure envy, comparability, self-relevance and experience recommendation effects. They asked “does this person’s post make you like him more or less?” to measure the effects of such recommendation. They found that participants liked someone who posted about an experiential purchase more than someone who posted about the material purchase (Lin et al., 2018). The results also show that participants like less the person who posts about a material purchases than before.

Conclusion

We have discussed the experience recommendation with the help of previous research and studies. We saw that people derive more hedonic value from experiences than material possessions. Then we analyzed further about what underlies the differential hedonic benefits of experiential and material purchases. The connection we feel to those who have made the same experiential purchase tends to be stronger than the connection we feel to those who have made the same material purchase (Gilovich & Kumar & Jampol, 2014). Because people are more likely to converse about their experiences than their possessions. Previous works demonstrate how factors that have been shown to differ between material and experiential purchases—closeness to the self, social approval, and purchase uniqueness—help explain why experiences have higher conversational value than objects (Bastos & Brucks, 2017). So they possess a greater story utility for the consumer even after the purchases was made. Although our material goods “disappear” through habituation, our experiential purchases live on in the memories we cherish and, as we have shown here, in the stories we tell (Kumar & Gilovich, 2015).

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