The experiences vs. stuff post

Lots of research from here and there suggests that people get longer lasting happiness from buying experiences than from buying stuff.

Obviously that means we should all become minimalists and travel the world, right?  Get 100% experiences and 0% stuff because experiences are always superior to stuff.

Obviously that’s silly.  (As is streaking through the world…you’re likely to get arrested.)

When we try to decide whether to do more of one thing than another, we’re interested in how much additional happiness an additional unit of each thing will give us.  This concept is termed, “marginal utility.”  We want to know how much happier one unit of something is going to make us.  We’re not interested in how happy all of the things we already have are making us, just how much adding or subtracting a unit of each thing will make us.

The canonical example of marginal utility (and diminishing marginal utility) is that of pizza.  Let’s say you’re stuck in Detroit on a weekend at 6pm at the conference center, starving, and the only place open is Sbarro at the attached mall.  The first slice of pizza gives a high marginal utility.  You’d be willing to pay a few dollars for it.  The second slice of pizza you don’t really need so much, so you’d only be willing to pay a couple of dollars for it– if it costs $3.50 you’ll only get one slice.  A third slice of pizza you might be willing to take free.  A fourth slice and you’re not really interested.  The happiness you get from pizza is determined by both the inherent value of the pizza and how much pizza you already have inside of you.  (And if you’re trying to decide between pizza and a beverage, the beverage gets more attractive compared to pizza the more pizza you eat.)

In this framework, experiences aren’t automatically better than stuff.  If you don’t have a lot of stuff, stuff becomes more valuable.  If you have a lot of stuff, travel becomes more attractive by comparison.

Basically what this happiness research is showing is that people in general have too much stuff and not enough experiences, so the marginal utility of an additional experience is greater than that of an additional unit of stuff. (Americans have too much stuff–did we really need a study to show that?  I thought the rubbermaid commercial made it pretty clear!)

Those of us who travel a lot don’t feel the need to travel anymore because we’ve long since hit diminishing marginal returns to happiness on travel.  Especially if we don’t have as much stuff as the average American.

So don’t take the research on happiness and experience as a mandate to get rid of all your stuff and spend all your time traveling!  There’s nothing wrong with you if you’d rather buy a china cabinet than spend a week in Tahiti.  Maybe for you the marginal utility of an additional unit of stuff is greater than the marginal utility of an additional unit of travel.  Maybe you have plenty of time to engage in your hobbies and not a ton of income, so adding to your wardrobe is more important than buying more time.  Maybe you don’t spend enough time at home doing nothing and would like to spend more.  We all have different values for these things in absolute terms and we all have different stores of these things.  Thus we all get different marginal utilities.

Just because the average American needs to declutter and travel more doesn’t mean you do too.  And that’s ok.

And maybe, just maybe, you want to buy thousands of books and nice shelves to put them in and a house big enough for a library and a comfy chair to read in.  In which case, we salute you.  (And secretly hope you invite us over to share.)