Happiness research, also known as positive psychology, has grown rapidly as an area of academic study in recent decades, resulting in some fascinating findings about what can influence our level of happiness. These findings suggest that certain decisions like whether to get married, moving to the suburbs, or choosing a high paying job can have a significant long-term impact on our happiness. Understanding the key findings in happiness research can help marketers improve the lives of their customers as well as our own.
The Income Plateau
Data across studies suggest that increased income has a stronger effect on happiness level at the lower ranges of income, but this effect appears to plateau at a certain level. When people are living in poverty, increased income can provide shelter, food, and transportation, which can reduce worry about life’s basic necessities. However, once individuals reach the middle class, studies have shown that additional income has little effect on the level of happiness. According to the Happiness Hypothesis, the small correlation from increased income may be explained by reverse correlation because happier people tend to get promoted. Despite the ability of richer individuals to buy more products designed to improve the life of the purchaser, we tend to quickly return to our baseline level of happiness, in an effect known as the hedonic treadmill.
The Adaptation Principle
A study of major lottery winners and paralyzed accident victims found that on average, both groups returned close to their baseline level of happiness within one year (The Happiness Hypothesis). People are very good at adapting to changes, which also means that material goods often provide only a temporary emotional boost that quickly fades.
The Progress Principle
We receive positive feelings when we make progress towards our goal, and often overestimate how happy achieving a goal will make us. Tony Hseih, the CEO of Zappos, recounts when he received the call where he learned that his company LinkExchange was sold to Microsoft for about $265 million. “The excitement of LinkExchange had disappeared long ago. Now we just had the drudgery of sticking around uninspired and unmotivated for another twelve months. ‘I guess we should probably walk back to the office then’ I said. ‘Okay’ and so we did in silence”. Often we receive more pleasure from making progress toward a goal than we do from achieving a goal. Products like Farmville can be highly addictive because they provide constant signals that show continuous progress. A training course can be highly engaging if it provides feedback about how the student is growing during the course.
The Paradox of Choice
In the book The Paradox of Choice, Barry Schwartz discusses how more choice can cause anxiety for shoppers. More options can lead consumers to be less confident with their purchase and more likely to feel regret. Too many choices can also cause people to avoid making a choice. Offering a small number of choices can make it easier for customers to make a decision and can lead to less buyer remorse.
The Importance of Control
While too much choice can cause problems, no choice at all can also have a negative impact on happiness. A lack of control can cause negative feelings which can help explain why people tend to be stressed after a traffic-filled commute. Residents of a nursing home who were given small choices like when to have movie night and which plants they wanted, experienced better health and higher levels of happiness. Giving customers a sense of control or the ability to choose can often lead to higher satisfaction.
Experiences Versus Material Goods
The book Happiness Hypotheis describes a study where participants were asked about purchases of experiences (such as a ski trip or a great meal) and material objects. The subjects felt happier when thinking of the experiences and thought this money was better spent. People are often driven to gain prestige through conspicuous consumption, in what the author of Happiness Hypothesis calls a happiness trap. Experiences can provide more happiness because they have social value while luxury goods are often purchased to impress people.
The Importance of Relationships
Happiness research has shown that the quality and quantity of relationships is one of the most influential factors in increasing happiness. The impact of relationships helps explain why church-goers are happier on average than non-church goers since they are often involved in the church community. Products or services that help people improve relationships can have great value to consumers.
Do you agree with these findings or have any to add? Please comment below.
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