Are We Happier Buying Experiences or Material Goods?

Article Title: Re-Examining the Experiential Advantage in Consumption: A Meta-Analysis and Review
Publication: Journal of Consumer Research
Authors: Evan Weingarten, Joseph K. Goodman
Citation: Weingarten, E., & Goodman, J. K. (2020). Re-examining the experiential advantage in consumption: A meta-analysis and review. Journal of Consumer Research, 47 (6), 855–877. https://doi.org/10.1093/jcr/ucaa047

Premise

Previous research has demonstrated that consumers experience an experiential advantage when they buy experiences rather than material goods. The authors (Weingarten & Goodman, 2020) completed a meta-analysis (a statistically focused study of studies) to examine the impact of this experiential advantage on creating positive experiences and exploring other factors that may contribute to satisfaction and well-being.

Summary

Background

Most consumer or marketing research has concluded that the experiential advantage of buying experiences versus material goods leads to greater consumer satisfaction. Still, it is less clear how or why this tends to occur, and this type of research has often lacked skepticism and rigor. Frequently, additional variables that may affect consumer experience have been ignored. The authors proposed a new explanation (model) of experiential advantage that accounts for the following factors: consumer autonomy, relatedness to product, and consumer self-esteem, specifically how each of these additional factors predicts happiness and purchase likelihood.

Methods

A meta-analysis (a quantitative review of previous research on specific topics) was used to assess what prior work has found regarding experiential advantage in consumer purchasing. The data allowed the authors to evaluate the new model’s accuracy. The authors used relevant information from over 100 studies to assess the overall effects and seek evidence for the proposed model.

Findings

The research results indicate that we may see an increase in well-being when we “buy experiences.” Buying experiences led to increases in areas like relatedness, autonomy, self-esteem, and meaningfulness. In other words, buying experiences (versus material purchases) increased consumer relatedness, autonomy, self-esteem, and meaningfulness, and each of these four factors increased overall happiness.

Critique

There were a couple of limitations in this work that can affect the implications and findings:

1. Many of the articles used within it contain only correlational data. While the “study of studies” (meta-analysis) gives us some assurance that the results will generalize outside of the research itself, the correlational data can affect the conclusions that can be drawn. Despite this meta-analysis, whether experiential purchases cause greater happiness is still unknown.
2. The proposed model contains overlapping concepts (happiness and meaningfulness) and is not comprehensive. Factors outside those evaluated may still contribute to the experiential advantage that are not accounted for in the model.

Implications

Individuals and Clients

It would be incorrect to interpret the article as suggesting that material purchases cause unhappiness for individuals. However, recognize that material items and their value can depreciate over time. Experiential purchases—those that form memories and moments—tend to significantly impact wellness. This difference is not dichotomous, nor is it a black-and-white debate. Both types of purchases can provide benefits in their own way, but experiences appear to bring about increased positive emotion.

Financial Planners, Therapists, and Coaches 

For professionals who advise consumers on how and where to spend money, rather than discouraging material purchases, consider guiding clients to consider experiences as part of their spending plans. This could be particularly relevant for high- or ultra-high-net-worth clients who want to provide gifts to adult children.

Given the additional factors involved in the authors’ proposed model, these positive feelings of autonomy and meaningfulness could extend to you as a financial professional and the client’s perception of their relationship with you. Ultimately, this advice can provide very high mutualistic benefits with minimal risk of damaging the financial consultant-advisee relationship.