Getting the Most for the Money: The Hedonic Return on Experiential and Material Purchases

Abstract

Consumers everywhere are faced with the same dilemma: given limited resources, what sorts of purchases are most likely to produce lasting happiness and satisfaction? Put simply, how do you get the biggest hedonic bang for the buck? We discuss one rather simple solution: choosing experiential purchases (purchases made with the intention of gaining a life experience) over material possessions (purchases made with the intention of owning a physical object). Recent research has confirmed that experiences tend to produce greater hedonic gains than possessions (e.g., Carter and Gilovich, J Per Soc Psychol, 98(1), 146–159, 2010; 102(6), 1304–1317, 2012; Van Boven and Gilovich, J Per Soc Psychol, 85(6), 1193–1202, 2003), and has begun to investigate the underlying mechanisms as a way to illuminate the more fundamental psychological processes that govern happiness and satisfaction. We provide an overview of research that establishes three basic mechanisms behind the differences between experiences and possessions (comparison processes, connections to the self, and social connections) and we discuss how these mechanisms interrelate to produce greater, and longer lasting hedonic gains.