Question: Experiences or Things? What Do You Enjoy More?

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Dec 12, 2016
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Purchase Decisions, Behavioral Finance, Question of the Day, Research, Teaching Strategies, Current Events, Article, Generosity, Writing assignment

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This question seems apropos given the holiday season and is a great discussion starter. Ask your students to think about the 2-3 items that they purchased in the last year that they were (and continue to be) most excited about. Would they be classified as experiences or things?

This very accessible and relatively short (914 words or about 5 minutes) Scientific American article provides some scientific research to support one purchase type over the other (bold type are my own):

A lot of things, surely, including research (some of it conducted by us) showing that people tend to get more enduring satisfaction from the money they spend on experiences than from the material possessions they buy.

This work focuses on the distinction between experiential purchases (money spent on doing, like on travel, tickets to performances, and fees to visit museums or nature preserves) and material purchases (money spent on having, like on clothing, jewelry, furniture, and electronic gadgets). We have found that people tend to be happier when they invest in experiences because experiential purchases connect people to one another, enhance their sense of self, and, relative to material consumption, tend to be appreciated for their intrinsic value rather than how they compare to what others have.

When we’ve discussed this research with friends and family, a common reaction is an insistence that material goods are nevertheless a better use of one’s money because they last. While it’s typically true that possessions are indeed longer-lasting physically, experiences tend to last longer psychologically. Through a series of experiments, we’ve learned that the hedonic value people get from consuming experiences extends across a broad time course.

This kind of got me thinking about how giving experiences to others (tickets to a concert your friend has been keen on attending) could provide an even larger psychological benefit. Might be a good way to spread cheer this holiday season if gift-giving is part of your tradition.

Questions for your students:

  • How would you summarize this article in one sentence?
  • What do you prefer buying more: material possessions or experiences?
  • Provide an example of a purchase that you have made in each category in the last year and answer these questions:
    • How did you feel after you made the purchase?
    • How did you feel a few months after making the purchase?
    • Which do you prefer? Why?
  • Do you agree with the research findings? Why or why not?
  • Can you think of situations where things you purchase can create experiences?

 

 

 

 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.