The Age-old Adage Confirmed: Money Can’t Buy Happiness
As much as New Yorkers love Seamless and all things deliverable, they love their kitchen more
Convenience is everything in New York City. We all have busy schedules packed with to-dos from morning till dawn, and are constantly juggling multiple tasks at once.
Eating is no exception. I am confronted with the same conundrum almost every day: should I cook or should I order take out? If I do the former, I would save money, but I’d have to spend time grocery shopping and cooking, and then even more time cleaning up. If I do the latter, it’d be hassle-free and the food would at least be edible, but I’d be inching closer to exceeding my monthly budget and loosely monitored sodium intake for the day, again.
As a 20-something graduate student, I am sure (hopefully) I am not alone in this fight. So I thought I’d do a little experiment based on the theory of relativity outlined in behavioral economist Dan Ariely’s book Predictably Irrational. Ariely found that making choices is easy when people are deciding between options where one has a distinct advantage over the others. It becomes much harder and less rational however when the relativity is not as pronounced.
My question was this: Are people willing to pay to have someone else buy their groceries or cook their food for them according to their preferences? If so, which one holds more premium?
The method was simple. I intercepted 20 random passersby at Union Square on a busy Sunday morning and presented them with a scenario. For 10 of them, I asked:
Would you rather:
- Pay someone $50 to buy your groceries for a week
- Pay someone $100 just to cook for you for a week
- Pay someone $100 to buy your groceries and cook for you
For the other 10, the choices were reduced to:
Would you rather:
- Pay someone $50 to buy your groceries for a week
- Pay someone $100 to buy your groceries and cook for you
The participants ranged in age from 19 to early 40s, and were completely random in terms of race, socioeconomic status, occupations, and background.
The hypothesis was that in the first scenario, most people will choose the third option because it was clearly a better deal compared to the other two for the level of service provided. For an additional $50, the same price as the first choice, you not only have fresh groceries delivered to your door but also catered meals for an entire week. The cost of labor for cooking is a lot higher than simply grabbing items off of supermarket shelves. The choice was even more obvious with the presence of the second option, which acted as the decoy that guided people toward preferring the third one.
In the second scenario, the Predictably Irrational hypothesis was that most people will instead pick the first option even though the prices and circumstances were exactly the same as the first scenario. In the absence of the decoy, people lacked the relativity to rationally compare the value of the two choices.
My findings were far from predictable. Out of the 10 people surveyed in the first scenario, half picked the first choice and three opted for none of the above. Only one preferred the third option. The reason, however, was not economical, it was personal. People said they enjoyed cooking and buying their own groceries. They wanted to see and touch the ingredients and relish in the experience of putting together a wholesome meal. “Cooking is therapeutic,” one participant said.
For the second scenario, the result was 50/50. Half of the people opted for groceries only, and the other half groceries and cooked meals. Again, the preference for the first option was a personal one: people LOVE cooking.
Across the board, not a single respondent looked at the situation from a financial point of view. They did not compare and contrast which option would be more worth it or which delivered more bang for the buck. They picked the one that would make them the happiest. For one participant, he was willing to dish out $100 at that moment purely because he was “f*cking hung over” and would love to have a piping hot meal prepared for him.
The results of my experiment took me by surprise. They did not confirm my own hypothesis nor conform to Ariely’s findings that the rationality of people’s choices are controlled in large part by the existence or absence of a relative comparison.
But I did learn one thing: money and its purchasing power only take us so far in predicting human behavior. Across many situations, people do what makes them happy.
And what could be more rational than that?
