How money can buy happiness, wine edition

By Felix Salmon
October 28, 2013

I spent the past couple of days in Berkeley, participating in a number of events at the inaugural Berkeley Ideas Festival. The highlight for me was interviewing Donald MacDonald, the architect of the new (and magnificent) Bay Bridge. But I was also asked to present a little “provocation” on the second morning, in between heavier sessions covering topics like the effect of 3D printing on the manufacturing workforce and the rise of the plutocracy.

So I thought I’d be a little servicey, and let the audience into a secret: specifically, the secret of how to buy happiness with money.

Berkeley is a fun place to give such a talk, since it’s full of the kind of people who are convinced as a matter of principle that money can’t buy happiness. (Where “money”, much of the time, is code for “San Francisco”.) And it’s also the kind of place where the idea of the hedonic treadmill — the theory which says that we all have our own set level of happiness. Good things can happen to us, which make us happy, and bad things can happen to us, which make us sad, but the effect doesn’t last very long. Even if very good things happen to us, like winning the lottery, or very bad things happen to us, like becoming quadriplegic or losing a spouse, we eventually end up back where we started. (The only reasonably sure-fire way of bringing the set point down, interestingly enough, is becoming and then staying unemployed.)

Now there are things which make us happy, briefly. You might even have heard the saying that “anybody who thinks that money can’t buy happiness, has never bought a puppy“. But every adult also knows that for all their upside, puppies also come with a downside.

So what we’re looking for here isn’t something which will lift the line forever — only spiritual gurus promise that. And it’s not something where short-term happiness ends up being paid for with long-term side-effects. Instead, what we’re looking for is something which will predictably make us happier in the short term, which will have very little in the way of negative long-term effects, and which can be repeated as often as you like. Basically, any time you want to be happier, spend some money on this, and you’ll be happier. And then it’s over, and you can go back to your life, and if you want to do it again, you can.

This is a non-trivial task, because of the way the hedonic treadmill works: you get used to stuff. Remember those lottery winners. People become habituated to nice things: while your bigger house or fancier car can indeed make you happy in the short term, you get used to it pretty quickly, and before long you just become scared to lose it. I was very happy with my living conditions when I was in college, but I’d hate to go back to them now. So if your goal is happiness, you don’t want to wind up in what I think of as the collector mindset: the feeling that whatever you have is somehow incomplete, and that buying new things is a way of temporarily filling a void. We don’t want that: we don’t want something where you’re sad when you don’t have it. We just want something where you’re happy when you do have it. And which you can buy with money.

Now most of the time, in most areas, even if money doesn’t buy happiness, it does buy quality. If you spend $100,000 on a car, it’s going to be a better car than the one rusting away on the second-hand lot which is on sale for $3,500. The positive correlation between price and quality is a basic law of capitalism — but there are exceptions. And one of the main exceptions is wine.

If you study what happens in blind tastings, you get the same result over and over and over again. You can try this at home, if you like; I’ve done that many times, with friends, and it’s a lot of fun. You can do a scientific analysis of more than 6,000 wine tastings, which found a negative correlation between price and quality. Or you can look at the wines which win medals at wine competitions, where it turns out that winning one competition gives you no greater likelihood of winning the next one, and where if you enter the same wine two or three times in the same competition, it can appear all over the place in the final results.

But here’s the trick: if you can’t buy happiness by spending more money on higher quality, then you can buy happiness by spending money taking advantage of all the reasons why people still engage in blind tastings, despite the fact that they are a very bad way to judge a wine’s quality. If you know what the wine you’re tasting is, if you know where it comes from, if you know who made it, if you’ve met the winemaker, and in general, if you know how expensive it is — then that knowledge deeply affects — nearly always to the upside — the way in which you taste and appreciate the wine in question.

Fortunately, nearly all of the time that we taste wine in the real world, we do know what we’re drinking — and we do know (at least roughly) how expensive it is. In those situations, the evidence is clear: When we know how much we spent on what we’re drinking, then the correlation between price and enjoyment is incredibly strong.

The more you spend on a wine, the more you like it. It really doesn’t matter what the wine is at all. But when you’re primed to taste a wine which you know a bit about, including the fact that you spent a significant amount of money on, then you’ll find things in that bottle which you love. You can call this Emperor’s New Clothes syndrome if you want, but I like to think that there’s something real going on. After all, what you see on the label, including what you see on the price tag, is important information which can tell you a lot about what you’re drinking. And the key to any kind of connoisseurship is informed appreciation of something beautiful.

In another session at the Berkeley conference, I interviewed Randall Grahm, the biodynamic winemaker. I love biodynamic wines, even though I think that the philosophy behind them (cosmic rays, etc) is in large part completely bonkers. And I think that a large part of the reason why biodynamic wines taste so honest and delicious is that the discipline of biodynamic winemaking forces winemakers to spend much more effort and concentration on the way they grow and harvest their grapes. Similarly, when you really pay attention to the wine that you’re drinking — something which you’re much more likely to do when you know that it’s expensive — you’re going to be able to discover beauty and nuance which you might otherwise miss.

What’s more, it stands to reason that the more we know about what we’re drinking, the more we’re going to like it. And that if you’re talking about something as complex and enigmatic as wine, the apotheosis of agricultural artistry, then there’s going to be more to find in a bottle of fine Burgundy than there is in a bottle of Blue Nun. After all, the global consensus on which wines are the very best in the world has been remarkably consistent for centuries.

Taste in wine is a real thing, which, while it does change over time, does so much less radically than does, say, taste in furniture. It’s an elusive thing, hard to pin down, and there are many reasons why it’s especially hard to isolate in the artificial environment of the blind tasting. But it does exist, and it’s undeniable that nearly everybody who buys and drinks expensive wine (say, $20 per bottle and over) gets real pleasure out of doing so. (“Real pleasure”, I should note, is a redundant phrase: all pleasure is real, no matter whether its genesis is more likely to be a label or a liquid.)

And here’s the really clever bit: even if you think that this is all just a case of the Emperor’s New Clothes, and that the whole concept of fine wine is at heart a con, the correlation between price and pleasure still holds up. As Daniel Kahneman says, it’s one thing to know your cognitive biases; it’s something else entirely to overcome them.

I, for instance, am absolutely convinced, on an intellectual level, that the whole concept of “super-premium vodka” is basically one big marketing con. Vodka doesn’t taste of anything: that’s the whole point of it. As such the distinction between a super-premium vodka and a premium vodka is entirely one of price and branding. And yet, it works! The genius of Grey Goose was that it created a whole new category above what always used to be the high end of the vodka market — and in doing so, managed to create genuine happiness among vodka drinkers who spent billions of dollars buying up the super-premium branding. But if someone asks me what kind of vodka I’d like in my martini, I still care, a bit. And if I my drink ends up being made with, say, Tito’s, I’m going to savor it more than I would if I had no idea what vodka was being used.

What’s more, you don’t need to spend hundreds of dollars on first-growth Bordeaux for this to work. You just need to spend a little bit more than you normally do — enough that you consider it to be a special bottle of wine. That’s it! When you sit down and pop it open, probably with people you love, in pleasant surroundings, everything is set for a very happy outcome.

And you can do this again and again and again. Spend money on an expensive bottle of wine, open it up, drink it, enjoy it, repeat. I’m not talking about collecting wine, here, that’s a different pathology. I’m just talking about drinking it. There’s really no downside, beyond for the money you’re spending — a single bottle of great wine, shared with a friend or two, isn’t even going to give you a hangover. You can convert money into happiness as often as you like: it never gets old.

This explains, I think, why rich people tend to be so fond of fine wine: it’s the most consistently reliable way that they can convert money into happiness. So if you have a bit of disposable income, get yourself down to your local wine shop. It’ll make you happy, I promise.


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Ooo good, I can by the Lagavulin this week instead of the Teachers Highland Cream, I’ll be so happy come the weekend.

Posted by BottyGuy | Report as abusive

More than you usually do, is the failure point, for the more often you do it, the more usual it becomes. One could as well go to Starbucks, just not everyday. Small sensory pleasures are among the greatest joys, but also easy to become accustomed to.

Posted by MyLord | Report as abusive

Very good advice here Felix. As cool as the meat of that conference sounded I guarantee your presentation will be one of the best remembered 3 months or 3 years!

Posted by y2kurtus | Report as abusive

This note is way off base.

Wine, like classical music, opera and well physics needs a framework for appreciation. Everyone can express an opinion about a Sauterne versus a Cornas for example but how about within a Cornas or a Sauterne?

Saying large numbers of people in blind tastings showed no correlation is simply like saying large numbers of ignorant people showed no sign of intelligence. Well, yes.

Saying there is no correlation between price and quality is literally true as you don’t account for taste. I would much rather drink a $30 Bourgogne than a $1000 (generally over extracted) Harlan Estate. That is called taste preference. Undoubtedly those whose tastes are inclined to the Parker palate would prefer the Harlan and with the training in wine would be able to detect and appreciate large price differences. Even amongst the very knowledgeable within a specific grape and wine style there may be preferences that do not correlate with price (particularly in the sub $100 market). Even very highly priced Burgundies, because of the very small production levels, price is determined by demand and supply and of course taste preference.

I can make you a quasi Champagne expert in about two to three hours. I guarantee that after two to three hours tops I can train you to detect pinot based vs Chardonnay, Extra Brut vs normal and help you detect your own taste preference. (Standing offer. Just email me) Post that you will understand that where appreciation requires a framework (say opera), ignorance of the crowds does not produce intelligent results. (warning. Learning your taste preference can be hazardous to your pocket book)

Love your writing by the way!

Posted by sanoumreth | Report as abusive

If the thesis is to let the placebo run its course, why not set the bar at a $5 bottle of wine?
And why doesn’t this happiness impact happen with say, charitable giving?

Posted by thispaceforsale | Report as abusive

Vodka for a martini? I guess money can’t buy taste. :)


Posted by GodOfBiscuits | Report as abusive

You make a very convincing case that there’s a correlation between cost and enjoyment–something I think we all know exists even without such proof, but it’s definitely nice to see it all laid out like this.

However, I can’t tell if you’re attempting to make the argument that there is no such thing as a finer wine or vodka. I strongly disagree. Just because the majority of people apparently lack the refinement in taste to appreciate the (admittedly subtle) difference between two wines of differing quality doesn’t mean it doesn’t exist. And people getting a bit of pleasure out of *thinking* they’re drinking something better also doesn’t disprove that some people can taste the difference.

I think, as with most things, there’s a small percentage of people who have taken the time to understand the differences and have come to appreciate them while the vast majority don’t have the patience and prefer the “it costs a lot so it must be good” mentality.

Posted by AndreRichards | Report as abusive

to add to the last comment…a small percentage of people can actually taste better — they’re called super tasters and it owes to the number and type of taste buds they have.

Posted by mdelvecchio | Report as abusive

I am not buying into the Vodka theory without some input from experts. I admittedly know nothing about Vodka.

But I do know about a vast majority of people who believe that all water is equal. Who tell me I should avoid bottled water, and instead use water from the tap as if it was the same thing. It’s the majority opinion, I am well aware of it, no need to “correct” me in replies. I’ve read it a thousand times.

That, I have to say, is absolute BS. Where I grew up we had tap water coming directly from reservoirs in the Alps – this was better than most bottled water you can buy here in the US. But we also had a cottage in the country where all rivers were drinking water quality – this was a point of pride there. And there was a particular spring in the forest where I would go and collect water from – it tasted better than any water I knew. Today I can buy Evian mineral water almost anywhere in the world, and it’s a similar quality.

The point is, there is quite a wide range of water quality out there.

Since there’s water in Vodka, it follows there must be a range of different quality Vodkas as well. Water is probably not the only distinction point but it’s got to be one of them.

Just because you can’t taste the difference doesn’t mean there isn’t one. Again I know nothing about Vodka, just saying that there is certainly a possibility of difference. Fight the ignorance.

Posted by nikh | Report as abusive

I don’t understand why wine is different from coffees or Scotch whiskies.

There are obvious differences among the various Islay single-malts that I favor, and it’s no problem distinguishing Peet’s Indonesian offerings from their MidEast or Central American blends. There are even bigger differences between Peet’s dark-roast style and the currently very popular Blue Bottle or Spyglass offerings in the Bay Area that are lighter roasts. While these are obviously very fine coffees, they move out of my preference zone, just as I find Highland Scotch less interesting.

Sometimes the full-bodied coffees lose their earthy, chocolaty associations and just get too heavy and muddy. Might be variation from lot to lot, or more likely, I’m just a bit tired of the same old same old, and want some novelty in the cup. Blend in a little spicy Ethiopian and I’m off to the races again.

All these seem real, so much so that the observations are banal. But what is NOT real, is the idea that any one of these coffees is “best” or that the Port Charlotte whiskey that seemed a revelation when it was poured a couple of years back (and I knew nothing about), would meet others’ tastes as the right blend of smokiness, peatiness, sweetness, salt air, etc.

With wines there are another few dozen dimensions and tastes that can intrigue or be repetitive, can amplify another sense or smother it. So with more variables, faulty memory (who can easily recall their tasting notes from an earlier vintage of the same vintner?), it’s unsurprising that casual observation is going to find a “best” in that realm.

Posted by WaltFrench | Report as abusive

I have a number of friends who are heavy Vodka drinkers. That sounds worrying, but at worst I would call them “business executives who are also functioning alcoholics”.

Saying that Vodkas don’t taste of anything or that they’re all similar is sort of like saying “Coke tastes like Pepsi” for these folk. If you do a taste test at a Vodka bar (these things do exist in most large cities), it’s pretty clear that not all Vodkas are created equal.

Grey Goose is different not just for its marketing – it really does taste differently from Stoli or Absolut. Better? I guess it depends on what you want. I’d say it is more of a neutral flavour than others, and that’s what they often want.

Marketing is just an amplifier. It creates fads. The fundamental product still has to be good/better in some small discernible way if it is to remain a hit over years.

Posted by psvt | Report as abusive

All vodka tastes the same? Just because you cannot taste a difference does not mean others can’t. I can definitely tell the difference between Absolut and Grey Goose. Hard to tell between Belvedere and Grey Goose. Easy to tell between the latter two and something like Kettle One. I agree a lot of it is branding but saying that all vodkas taste the same is sort of ridiculous.

Posted by Decidocisum | Report as abusive

If you’re making or ordering your martinis with vodka you’re doing it wrong.

Posted by mdeav | Report as abusive

Is this some weird kinda Pascal’s Wager allegory or something?

Or, connecting to your recent series, are you trying to trick people into enjoying paying for content?

Posted by BillSeitz | Report as abusive

I love the comments from the misinformed people who think that quality is an objective measure of something like wine or vodka. Do they not see that thing WAY over there which is your point? Nope, even though you described it very clearly, they missed it. Too bad. I enjoyed the article.

Posted by tinyhands | Report as abusive