Can money buy happiness?
Yes, if you spend it on other people, says Michael Norton, an associate professor at Harvard Business School. (H/t Business Insider.)
Norton said at a recent TED talk that spending money on yourself does not make you happier, but spending money on others -- no matter how it is spent, or how much -- could improve your mood.
"If you think money can't buy happiness, you're not spending it right," Norton said. "You should stop thinking about which product to buy for yourself, and try giving some of it to other people instead."
"The reason that money doesn't make us happy is that we’re always spending on the wrong things, and in particular that we’re always spending it on ourselves," he said.
Norton said that in numerous studies, "people who spent money on other people got happier; people who spent money on themselves, nothing happened. It didn’t make them less happy; it just didn't do much for them."
In nearly every country in the world, people that give to charity are happier, according to research by Gallup cited by Norton.
Norton said that in a study at the University of British Columbia, students that were given money and spent it on others became happier, while students that were given money and spent it on themselves were not any happier. Norton said that the same effect was found in Uganda.
Taking your peers out for a drink after work isn't wasted time, Norton said. In fact, work teams that spend money on happy hours perform better at work, according to research cited by Norton.
"Money often makes us feel very selfish and we do things only for ourself," Norton said, but "spending on other people has a bigger return for you than spending on yourself."
And buying a small gift for your mom can make you just as happy as giving to an ambitious charity project.
"The specific way that you spend on other people isn't nearly as important as the fact that you spend on other people in order to make yourself happy," Norton said. "You don't have to do amazing things with your money to make yourself happy. You can do small trivial things and yet still get these benefits from doing this."
Norton's research is not the first to find that money leads to happiness, up to a certain point. People in households that earn more than $50,000 per year are more satisfied with their quality of life than people in households that earn less than $50,000 per year, according to a recent Marist poll.
A study by Princeton University also found that a larger paycheck leads to a happier life, up to an income of $75,000 per year. After earning that amount, money has no effect on happiness, according to the study.
Of course, the happiness threshold is higher in cities with a higher cost of living, according to The Wall Street Journal. That threshold was $163,000 per year in New York City in 2010, compared to $62,000 in Pueblo, Colo., according to the WSJ.