This Scientist Put a Price on Happiness: Her Findings Might Surprise You

We’ve talked before, here at Wealthtender, about how money can (sort of) buy happiness, and it can certainly buy time. Now there’s a new study out that actually crunches the numbers in an attempt to put a dollar value on the various ways we use our time and money.

If you’re someone who’s permanently in pursuit of money, and is constantly sacrificing time to get more of it, you might want to consider these findings, and see if you can work them into your money mindset.

Professor Ashley Whillans, a social psychologist at Harvard Business School, studied how we should spend our time and money to best promote happiness. She used an econometric technique called shadow pricing, along with regression and analytic strategies, to assess the proportionate benefit of a time choice relative to an income increase.

Essentially, she found a scientific way to measure what time is worth: a potentially important metric in a world where we all understand what money is worth, but don’t necessarily value time. That is, we all know what a $10,000 raise means, but we don’t necessarily know the true value of an extra couple of hours.

Most of us, in putting a value on time, look at it in one of two ways. Either we simply think about what our hourly rate at work is, and value each hour of our time at that level. Or we look at the hourly rate of the person who’s time we’re buying — say to clean our house, watch our kids, or do our yard work — and see time as being worth whatever that set charge is.

That’s why many of us will outsource things based on the difference between those two numbers. If we earn $40 an hour and can outsource a chore for $20 an hour, it’s worth doing. If the expense is more than we earn, it’s not worth doing.

That’s a sensible way of doing things. It’s certainly how I’ve tended to approach outsourcing in the past. But I’m re-thinking things based on this new study, because the concept of what time is truly worth can be a lot more nuanced than it seems on the surface.

Here are a few of the things that the study tracked, along with the dollar value put on each of them, in terms of the happiness gain for the average working American.

• Outsourcing a chore you hate: $18,000 a year
• Using your vacation time: $4,400 a year
• Taking time to savor your meals: $3,600 a year
• Valuing time more than money: $2,200 a year

Some of these things cost money, of course. You’ll have to pay to outsource that chore, or go on a vacation. But some of them are simple mindset shifts. Any of us can choose to savor our meals more or try and train our brains to think differently about how we value time and money.

Outsourcing chores is a particularly interesting one. Most of us do chores we hate, especially if they’re expensive or inconvenient to outsource. But a happiness gain of $18,000 a year is huge. How many of us would turn down a raise of that amount, even if it involved extra work we don’t like doing? Now imagine a raise of that level that actually involved doing less of the work we don’t like. Surely we’d all jump at that opportunity.

While the science is fascinating, it’s also not exact. We’re all different. Some people really do like doing chores and hate vacations. But the message is powerful.

For most of us, the value we put on time is more complex than our hourly rate, or the set price of the time we ‘buy in’. It’s well worth considering that in trying to design a lifestyle that balances time, money, and happiness.

About the Author

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen