Does spending $5 or $20 on a friend make you happier? Dunn, Aknin and Norton, 2008

In one of the best-known money experiments in psychology, 46 people were handed an envelope with either $5 or $20 and told to spend it by 5:00 p.m. that day. Those told to spend it on a gift for someone else or a charity donation were happier that evening than those told to spend it on themselves, and the amount made no difference. That is the result in Dunn, Aknin and Norton’s 2008 paper in Science, Spending Money on Others Promotes Happiness. I read the paper for this post, and it is a better recipe for a group of friends than I expected, with a few limits.

What the three studies found

The paper stacks three pieces of evidence.

1. A national survey. In a representative sample of 632 Americans, more spending on gifts for others and donations predicted greater happiness. Entering income as well did not remove the effect (b = 0.10, P < 0.03).
2. A bonus study. Sixteen employees reported their happiness before and 6 to 8 weeks after a profit-sharing bonus (average $4,918.64). The share they spent on others predicted later happiness, and bonus size did not.
3. The envelope experiment. Prosocial spenders scored higher after the windfall (F = 4.39, P < 0.04, effect size 0.10), with no effect of $5 versus $20.

The authors also asked other students to pick the condition that would make them happiest. A majority chose personal spending, and a majority thought $20 would beat $5. Both guesses were wrong, which is the most useful part for planning.

Does it hold up across countries and replications?

Aknin and nine coauthors (2013, Journal of Personality and Social Psychology) analyzed Gallup World Poll data from 136 countries (N = 234,917). The link between donating to charity and life evaluation was positive in 120 of them, and significant in about 59% of those 120. They also ran experiments in Canada, Uganda, India and South Africa. The authors call it a first step and note that their Study 3 relied on students.

The 2008 experiment is small, and it has been tested again. A 2022 replication in PLoS ONE (Kim and colleagues) found no significant difference with the original measure and analysis, F(1,130) = .35, p = .557. Its exploratory single-item happiness rating did favor prosocial spending (p = .025). Kim et al. say the original had roughly 10% power. They also describe a 2020 registered replication report by Aknin et al. with a significant effect in its closest replication (N = 730). I have only that description, not the 2020 paper.

A plan for a group of friends

None of these studies tested friends specifically, so this is my extrapolation from the design.

• Pick one day and a small amount. The study used $5 and $20 and found no difference, so $5 is fine.
• Set a same-day deadline. The experiment used 5:00 p.m., which is a practical way to make sure it happens.
• Let each person choose. The 2013 lab study offered an opt-out because the authors cite research that the benefit disappears when giving feels forced.
• Give the group a choice of targets. A friend’s coffee, a donation or a stranger’s gift all fit what the studies tested.
• Compare notes that evening. Nothing says sharing boosts the effect. It just gives you a reason to see each other.

For the follow-through, a standing plan can carry it, and a thank-you letter sent to a friend is a cheap way to spend the day.

For the relationship side of the question, what the Harvard Grant Study found is the long-term counterpart to this one-day experiment.