People are happier when they spend money on others than when they spend it on themselves, a new study by researchers in Canada and the United States suggests.

"Our results suggest that how people spend their money is at least as important for happiness as how much they earn," co-author Lara Aknin, a master's student at the University of British Columbia told CBCNews.ca via e-mail. "Therefore, small alterations in your spending choices — even small amounts — can have a significant impact on your happiness level."  

Aknin, along with lead author Elizabeth Dunn, an assistant professor with the University of British Columbia's department of psychology and Michael Norton, an assistant professor at the Harvard Business School, analyzed results from three reports of happiness and spending.

In the first experiment, the researchers asked 632 people in the U.S. to report their annual income and the breakdown of their monthly spending and rank their general happiness. 

"Regardless of how much income each person made … those who spent money on others reported greater happiness, while those who spent more on themselves did not," Dunn said in a release.

The second analysis looked at the reactions of 16 employees at a Boston-area firm when they received their bonuses, which ranged from $3,000 to $8,000.

"Employees who devoted more of their bonus to prosocial spending [spending on others] experienced greater happiness after receiving the bonus, and the manner in which they spent that bonus was a more important predictor of their happiness than the size of the bonus itself," the report said.  

For the final aspect of their study, the researchers gave 46 UBC-Vancouver campus students either $5 or $20 to spend in a day, with the instructions for half to spend the money on themselves and the rest to spend it on others. Like the results of the previous two studies, the researchers found that those who spent their money on others reported being happier.

"We found that spending more of one's income on others predicted greater happiness both cross-sectionally [in a nationally representative survey study] and longitudinally [in a field study]," Aknin said. "Finally, participants who were randomly assigned to spend money on others experienced greater happiness than those assigned to spend money on themselves."

Aknin said the research suggests "people can find more happiness by altering their spending patterns — redirecting more to others in the form of charity and gift giving."

She said based on the study, she will try to spend more on others, adding, "I hope others do too."

The findings are published in the March 21 edition of the journal Science.