Saturday, 2 August 2014

To Do or to Have?

You are after a hard week, it’s the weekend, time to treat yourself. There is the temptation to go a restaurant or maybe engage in a bit of retail therapy. You might pick up a new gadget, clothes or some other reward, to make yourself feel better. 

You see this approach used in some advertising campaigns. You are encouraged to “Go out and buy yourself something nice”, the ad tells you that you have worked hard all your career, now it’s time to think of yourself, you deserve a new BMW or a designer watch. As the people in L'Oreal Paris say,  'Because you're worth it'

Research suggests that you may be better off leaning more towards the restaurant idea rather than the clothes or gadgets. Leaf Van Boven from the University of Colorado and Thomas Gilovich from Cornell University addressed this in their article ‘To Do or to Have? That Is the Question’.

They defined experiential purchases as those “made with the primary intention of acquiring a life experience: an event or series of events that one lives through,” while defining material purchases as those “made with the primary intention of acquiring a material good: a tangible object that is kept in one's possession”.

Some items fall between these definitions, for example buying a new bike or a TV, where we get both the goods and a new experience. That said, most people surveyed were able to decide if recent purchases were in the ‘Do’ or ‘Have’ box.

When participants were asked which of these two purchases options made them happier, 57% of respondents reported that they got greater happiness from their experiential purchase, while only 34% reported greater happiness from their material purchase.

Similar results emerged when participants were randomly assigned to think about a material or experiential purchase they had made in the past. People contemplating a past experiential purchase reported being in a better mood than their colleagues contemplating a past material purchase. This suggests that experiential purchases produce more lasting hedonic benefits. The buzz from the experience lasts longer and is more durable than the buzz from getting a new material item.

Of course you do need to choose your experiences wisely. Buying yourself tickets to the Opera if you prefer a football game may not work very well. The idea is that you may feel happier going for a nice meal or some event rather than picking up a new pair of shoes. Better still, the buzz from the experience will last longer than the more temporary hit you get from picking up the clothes, shoes or gadget.

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