Considering money: Dan Ariely argues there is more to life than money

One autumn a friend talked me into a first — camping out in the desert. Until then I’d never camped much less considered it, and my inkling of the Mojave Desert involved three-digit temperatures and lizards.

The friend, a passionate star gazer, promised me the unique experience of pitch darkness and a constellation of stars and planets. “It will be a priceless experience,” he promised matter-of-factly.

A year later I reflect on that experience – the marathon drive, and what some might say the creature discomforts of limited shower use, stumbling on a tarantula, and pieced together meals – and agree that it was priceless.

The memory surfaced when reading an excerpt from Dan Ariely’s book “Dollars and Sense: How We Misthink Money and How to Spend Smarter,” on the first anniversary of its release. Ariely, the James B. Duke Professor of Psychology and Behavioral Economics at Duke University,founder of The Center for Advanced Hindsight (http://danariely.com), and Ethical Systems Collaborator, co-authored the bestseller with Jeff Kreisler, editor of PeopleScience an online publication that focuses on behavioral science.

The premise of “Dollars and Sense” is that as humans we overemphasize money, as it is often the simplest way to gauge the value of someone, or something: a job, an action or an event and, rightly or wrongly, success and failure.

Over the years Ariely and his Duke colleagues tested this hypothesis through various experiments and scenarios. Ariely has documented his argument that people do not make choices in rational ways and decisions can be impacted by numbers – including social security numbers, populations, age, number of countries – in previous books.

In his 2010 book “Predictably Irrational,” Ariely and colleagues Rebecca Waber, Baba Zhiv and Ziv Carmon, tested the hypothesis with an experiment that presented a pain killing placebo –  really a Vitamin C pill they named VeladoneRx– to participants. The fake drug with the fancy name had a $2.50 price tag while the same pill, without the brand name, was presented with a 10-cent price tag.  They found half of the participants reported experiencing less effect with the cheaper generic version. While both were placebos and therefore didn’t have any physiological effect, Ariely’s focus was on the impact of the price on people’s psyche.

Another example Ariely often referred to in his book is perceptions of the quality of wine. In his experiments, most people associate finer and “better” wine with a higher price tag and rarer label (read “limited edition.”).

Ariely concluded that this impacts our perception of what is valuable, which may or may not be “good.”  A high price tag doesn’t necessarily mean it’s a better product, as Ariely himself experienced with a sofa purchase a; he bought a $2,000 luxury sofa over a $200 sofa, which was equally functional. Turns out the majority of Ariely’s visitors complained the couch was hard to lower themselves into and get out of.

Over emphasizing monetary value often boils down to human psychology. I recall skirting a heavily discounted bin of clothes despite a pitch from a saleswoman that it was a “steal.” “Hmm, there must be something wrong with them. What’s the catch?” I recall wondering.

At a basic level, what Ariely points to is obvious. Most people value things by assigning meaning to a price. The bottom line is many of us swiftly rationalize “expensive must be good.”

“When we can’t evaluate something directly, as is often the case, we associate price with value,” he wrote.

The involvement of money itself can change the landscape of relationships and friendships and, at times, the value and success of a person.  National culture can also be a factor in over-valuing monetary success.

The overall concept hits home for me, especially as a first generation Chinese American. As Chinese parents go, my father was somewhat of a blacksheep believing my sister and I should follow our passions so long as we can make a living. He was the antithesis of the “tiger parent,” a reference to Amy Chua’s bestseller “Battle Hymn of the Tiger Mother.”  

Many Chinese emphasize money as a key gauge when it comes to success. Chinese parents often limit their children’s professional choices to medicine, law, engineering, associating salary with financial stability and a certain lifestyle.

Over-valuing financial success is also a cross-cultural phenomenon. There are numerous professions where it is challenging to measure success based off monetary value. Consider documentary filmmakers, musicians, artists and academics who spend years chiseling away at what they regard a diamond in the rough. Few would agree that their work is wasted. Only a small number will achieve the monetary success of, say, The Beatles, Georgia O’Keefe, Ang Lee, Oprah or a John Grisham (random sampling of my favorites), but how does one measure the joy and satisfaction of work?

Using money as the main measurement discounts non-tangible value markers such as an experience or an emotion — often fleeting moments that can’t be captured in monetary terms.  How could one begin to put economic value on a great first date, a heartfelt conversation with a friend, or reconnecting with a long lost family member?.  

Ariely continued: “Prices shouldn’t affect value, performance or pleasure — but they do. We are trained to make quick decisions based on money with every single transaction, and, especially in the absence of other value markers, that’s what we do.” That is though at best utopian.

Having socialized and traveled among various economic classes and been based in small towns, medium cities and big cities, I’ve also concluded that money can’t measure happiness or how much a person is valued. Money can make life easier and solve obvious problems, but it can not buy what often can’t be seen and can not buy things back, namely time.

Looking forward, Kreisler says he thinks “the principle with the most future impact is “pain of paying,” and the concept that paying for things stimulates the same region of our brain as pain.” The upside is “it should make us pay attention to the decision.  But, instead of feeling that pain and thinking about our financial decisions, what we’re doing as a culture is numbing the pain, so we don’t feel it, so our decisions become less thoughtful.” Proof of point, E-ZPass and auto pay.

A year after publication of “Dollars and Sense” Ariely reflects that, “I’ve learned a lot about the truly meaningful value of non-monetary rewards in engagement, motivation, habits, loyalty, wellness and more. My instinct – that money isn’t everything but is often the only thing by which we measure everything – is a solid foundation for the study of other, better ways to measure our lives’ worth. I look forward to seeing how much further away we can go.”

While a multi-faced value marker of life’s milestones has yet to be achieved, I share Ariely’s hope that it is in the pipeline. Striving for this might be a higher calling, but certainly worth the effort.