Want to make someone incredibly happy? Give them $5, or $20. But you can't stop there.
A few years back researchers Elizabeth Dunn, Lara Aknin and Michael Norton approached students at the University of British Columbia Vancouver in the morning and administered a happiness questionnaire, after which they gave them either $5 or $20. They told half to spend it on themselves as soon as possible, and the other half to spend it on someone else.
The first thing they discovered when they readministered the happiness questionnaire at 5pm was that the amount of money made no difference. Five dollars did just as much as $20. And for those who had spent it on themselves (on magazines, at Starbucks and the like) that was nothing. They were no happier than they had been before.
But the half that spent the money on someone else (on toys for children, donations to the homeless and so on) were a good deal happier.
Without fully realising it, Dunn, Aknin and Norton had helped crack what's known as "happiness paradox" or "Easterlin paradox", named after the economist who came up with it. Based on inadequate measurements and broadly accepted until about a decade ago, it seemed to show that, when measured over time or between countries, more money didn't create more happiness.
It's now widely accepted that it does, at least for big changes in income. And it should. There's a lot you can do with more income, including giving it away. To the extent that more income does not create more happiness, that could be because people aren't doing the right things with it. As Dunn, Aknin and Norton put it, "how people spend their money may be as important for their happiness as how much money they earn".
So they surveyed workers at a large Boston firm one month before and two months after they received their annual bonuses, which averaged $US5000 ($6800). The more of their bonuses they had spent on buying things for someone else or donating to charity, the more their happiness had increased.
Even toddlers seem to delight in giving. Aknin videotaped children between the ages of 22 and 24 months who had been introduced to a puppet (a monkey) they had been told "liked treats". The researcher then gave them some treats (goldfish crackers) and asked them to share some with the monkey. Then the researcher "found" an extra one and asked them to pass it to the monkey.
Coding of the facial expressions by two assistants showed the children were happier passing the treats to the monkey than they were receiving them themselves. But they were the happiest of all when they gave up treats they already had to share with the monkey.
At the US National Institutes of Health neuroscientist Jordan Grafman conducted the same sort of experiment on adults, with their heads in a brain scanner. After money had been placed in their "accounts", they were presented with a list of charities and told they could pick some to donate to, or decide not to and take some of the money home.
Whenever they decided to donate, parts of their middle brain lit up, the same parts that control cravings for food and sex, and also the same parts that were activated when the money went into their accounts.
He concluded there was nothing particularly sophisticated about the decision to give. It was as basic as the need for sex, and food.
And sex comes into it. There was another bit of the brain that lit up: a small part of the frontal lobe that's full of receptors for oxytocin, the so-called "love hormone" that's released during sex, childbirth and breastfeeding.
Whereas adrenalin gives us "fight or flight", oxytocin gives us lust and trust. It makes us both more loving and more loyal, bonding us to each other. It's what most of us want.
Many of us are unhappy at Christmas. The Paul Kelly song How to Make Gravy is about someone who can't be with the ones he loves. He isn't feeling miserable because of what he won't get, he is feeling miserable because, this year, he won't be able to give; because this year he won't be flooded with oxytocin.
That makes it sound selfish, but it isn't. Giving is a human duty. It's what we do because we're part of the species. That's why it makes us feel better.
Peter Martin is economics editor of The Age.
