Undercover Economist

June 6, 2014 5:24 pm

The four lessons of happynomics

‘Happiness is surely important, but the case for letting economists loose on the subject is less clear’
Illustration by Harry Haysom of happynomics©Harry Haysom

The discipline of happynomics (or to give it an academically respectable title, “the economics of subjective well-being”) is booming. Respected economists have joined the field, from Lord Layard in the UK to White House appointees such as Alan Krueger and Betsey Stevenson. Several have been charmed in by Daniel Kahneman, a widely admired psychologist with a Nobel Memorial Prize in economics.

Happiness is surely important, but the case for letting economists loose on the subject is less clear. So are happyconomists discovering things that will put a song in your heart and a smile on your face? Perhaps. After reading a stack of books about the economics of happiness, and seeking advice from some of the researchers involved, allow me to present four tips for happiness from the dismal science.

Number one: don’t be distracted by the obvious. When buying a new car, it’s natural to imagine yourself thrilling to its acceleration. When buying a new house, it’s only human to ponder the pleasure of hosting guests at a summer barbecue on the patio. But such thoughts fall prey to what psychologists call “the focusing illusion”. Most of our time will be spent neither throwing summer parties nor overtaking lorries. Yet we’re swayed by these attractions because we’re focusing on them just at the moment that we decide.

The focusing illusion was splendidly captured by a pair of questions asked of college students by researcher Norbert Schwartz and others: “How happy are you?” and “How many dates did you have last month?” The research team discovered that people having a lot of dates also say they’re feeling very happy – but only if asked about the dates first. If the happiness question comes first, there’s a far smaller correlation between the answers. Those students asked initially about their love lives continued to think about them when pondering their happiness. Otherwise they might have been worrying about money, career or exams.

The focusing illusion lies in wait for us whenever we make a decision. Nattavudh “Nick” Powdthavee, an economist and author of The Happiness Equation, says that we have to try to “look beyond what’s salient about an experience”. Don’t just think about the obvious when making decisions; think about how day-to-day life is likely to change as a result – if it changes at all.

The second piece of advice is to pay attention selectively. It turns out that we grow accustomed to some conditions, happy or unhappy, but not to all.

The study which sparked the idea that we can get used to almost anything was published by Philip Brickman, Dan Coates and Ronnie Janoff-Bulman in 1978. It compared the happiness of paraplegic and quadriplegic accident victims to that of lottery winners – and discovered that the disabled people were scarcely less happy than the millionaires. Apparently we can bounce back from some awful experiences. (It is sad and troubling that a few years after making this discovery, Brickman killed himself.)

But how exactly is this apparent process of habituation supposed to work? Here’s where happiness economics has the long-run data to help. Consider bereavement: we cope by paying less attention as time goes by. A friend said to me, months after my mother and his father had both died, “You don’t get any less sad when you think about them but you think about them less often.”

The same is true, alas, for the nice things in life: we begin to take them for granted too. But there are experiences – unemployment is one of them; an unhappy marriage another – that depress us for as long as they last. What those experiences seem to have in common is the ability to hold our attention. Commuting, although shorter and less serious, is a classic case – annoying but also stimulating enough that we keep noticing the annoyance.

This suggests that we should look for the opposite of commuting: positive new experiences that are engaging enough to keep being noticed. In this case “count your blessings” is perfect advice.

Third, try nudging yourself to happiness with the techniques of behavioural economics. Paul Dolan, another economist and the author of the forthcoming Happiness by Design, advocates doing some preparation to make it easier to do what brings us joy. If you wish to read more, for example, set your browser home page to a book review site, leave books lying around your house and make a commitment to visit a literary festival. Make the new habit easy to do and hard to ignore.

Finally we must keep a sense of what’s possible. I asked Daniel Kahneman himself for his advice, and he made some evidence-based suggestions about the importance of friends and family. But he also pointed out that much of our happiness seems genetically predetermined. It’s possible to give good advice, he said, but “we shouldn’t expect a depressive person to suddenly become extroverted and leaping with joy”. In happiness, as in life, we economists must know our limits.

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Tim Harford’s latest book is ‘The Undercover Economist Strikes Back’; Twitter: @TimHarford

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