As the saying goes, “Money can’t buy happiness.” But according to a new study co-authored by Psychology Professor Daniel T. Gilbert, that traditional belief may not be entirely true.

The as-yet-unpublished study—written with Elizabeth W. Dunn ’99 of the University of British Columbia and Timothy D. Wilson of the University of Virginia—argues that most people can purchase happiness, but they are terrible at gauging what will provide them with the greatest satisfaction. People ultimately spend money on “all the wrong things,” the study claims.

“Money is an opportunity for happiness,” Dunn told a British Columbia newspaper, “but it is an opportunity that people routinely squander because the things they think will make them happy often don’t.”

The general understanding over recent years has been that money is capable of purchasing happiness up to a certain extent, given that some sources of happiness are not for sale. But the new study challenges this viewpoint by arguing that “money can buy many, if not most, if not all of the things that make people happy.”

Scientific reasons lie behind peoples’ inability to derive happiness from money, according to the study. Most people do not understand basic scientific facts about happiness, about what creates and sustains it, and they consequently do not spend money in ways that optimize their happiness.

To illustrate this point, the report assesses various decision-making processes that individuals undertake to maximize their happiness.

For instance, the study cites the use of the website Bizrate.com to compare the costs of goods. While the site allows consumers to compare prices and make the best possible decision for themselves financially, the professors argue that making choices based upon price may not maximize happiness.

“Comparison shopping may sometimes come at a cost,” the study said.

The paper also considers the decisions of Harvard students, who base their Housing preferences on factors that they do not necessarily consider the most important.

When first-year students were asked to determine the feature most important for their happiness in their assigned upperclassman House, the students cited social life, community, and relationships with roommates as the foremost factors. But immediately before Housing Day, students instead placed a much higher emphasis on the physical features of each House.

“Because students focused excessively on highly variable features of the houses, they fell victim to the impact bias, overestimating how happy they would be living in the physically desirable houses and how miserable they would be living in the less desirable houses,” the study stated.

The three co-writers were not available for comment yesterday.