Gross National Happiness, (GNH; Dzongkha: རྒྱལ་ཡོངས་དགའ་སྐྱིད་དཔལ་འཛོམས།) sometimes called Gross Domestic Happiness (GDH), is a philosophy that guides the government of Bhutan.
It includes an index which is used to measure the collective happiness
and well-being of a population. Gross National Happiness Index is
instituted as the goal of the government of Bhutan in the Constitution of Bhutan, enacted on 18 July 2008.
History
The advent and concept of "Gross National Happiness" (GNH) germinated in the mind of BodhisattvaDruk Gyelpo, the 4th King of Bhutan, Jigme Singye Wangchuk,
groomed with the evolution of "Gaki Phuensum" (Peace and Prosperity)
and the modernization period of Bhutan during the reign of Druk Gyelpo,
the 3rd King of Bhutan, Jigme Dorji Wangchuk.
The term "Gross National Happiness" as conceptualized by the 4th
King of Bhutan, Jigme Singye Wangchuck, in 1972 was declared as, "more
important than Gross Domestic Product."
The concept implies that sustainable development should take a holistic
approach towards notions of progress and give equal importance to
non-economic aspects of wellbeing.
In 2011, The UN General Assembly
passed resolution 65/309, "Happiness: towards a holistic approach to
development", urging member nations to follow the example of Bhutan and
measure happiness and well-being and calling happiness a "fundamental
human goal."
In 2012, Bhutan's Prime Minister Jigme Thinley and the Secretary-General Ban Ki-Moon of the United Nations convened the High Level Meeting: Well-being and Happiness: Defining a New Economic Paradigm to encourage the spread of Bhutan's GNH philosophy. At the meeting, the first World Happiness Report
was issued. Shortly afterward, 20 March was declared to be
International Day of Happiness by the UN in 2012 with resolution 66/28.
Bhutan's Prime MinisterTshering Tobgay proclaimed a preference for focusing on more concrete goals instead of promoting GNH when he took office, but subsequently has protected the GNH of his country and promoted the concept internationally. Other Bhutanese officials also promote the spread of GNH at the UN and internationally.
Definition
GNH is distinguishable from Gross Domestic Product
by valuing collective happiness as the goal of governance, by
emphasizing harmony with nature and traditional values as expressed in
the 9 domains of happiness and 4 pillars of GNH. According to the Bhutanese government, the four pillars of GNH are:
The nine domains of GNH are psychological well-being, health, time
use, education, cultural diversity and resilience, good governance,
community vitality, ecological diversity and resilience, and living
standards. Each domain is composed of subjective (survey-based) and objective indicators. The domains weigh equally but the indicators within each domain differ by weight.
Bhutanese GNH index
Several scholars have noted that "the values underlying the individual pillars of GNH are defined as distinctly Buddhist,"
and "GNH constructs Buddhism as the core of the cultural values of the
country (of Bhutan). They provide the foundation upon which the GNH
rests." GNH is thus seen as part of the Buddhist Middle Way, where "happiness is accrued from a balanced act rather than from an extreme approach."
Implementation in Bhutan
The body charged with implementing GNH in Bhutan is the Gross National Happiness Commission.
The GNH Commission is composed of the Prime Minister as the
Chairperson, Secretaries of each of the ministries of the government,
and the Secretary of the GNH Commission.
The GNH Commission's tasks include conceiving and implementing the
nation's 5-year plan and promulgating policies. The GNH Index is used to
measure the happiness and well-being of Bhutan's population. A GNH
Policy Screening Tool and a GNH Project Screening Tool is used by the GNH commission to determine whether to pass policies or implement projects.
The GNH Screening tools are used by the Bhutanese GNH Commission for
anticipating the impact of policy initiatives upon the levels of GNH in
Bhutan.
In 2008, the first Bhutanese GNH survey was conducted. It was followed by a second one in 2010. The third nationwide survey was conducted in 2015. The GNH survey covers all twenty districts (Dzonkhag) and results are reported for varying demographic factors such as gender, age, abode, and occupation.
The first GNH surveys consisted of long questionnaires that polled the
citizens about living conditions and religious behavior, including
questions about the times a person prayed in a day and other karma
indicators. It took several hours to complete one questionnaire. Later
rounds of the GNH Index were shortened, but the survey retained the
religious behavioral indicators.
The Bhutan GNH Index was developed by the Centre for Bhutan Studies
with the help of Oxford University researchers to help measure the
progress of Bhutanese society. The Index's function was based on the
Alkire & Foster method of 2011. After the creation of the GNH Index, the government used the metric to measure national progress and inform policy.
The Bhutan GNH Index is considered to measure societal progress similarly to other models such as the OECD Better Life Index of 2011, and SPI Social Progress Index
of 2013. One feature distinguishing Bhutan's GNH Index from the other
models is that the other models are designed for secular governments and
do not include religious behavior measurement components.
The data is used to compare happiness among different groups of citizens, and changes over time.
The holistic consideration of multiple factors through the GNH approach has been cited as impacting Bhutan's response to the COVID-19 pandemic.
Dissemination
In Victoria, British Columbia, Canada,
a shortened version of Bhutan's GNH survey was used by the local
government, local foundations and governmental agencies under the
leadership of Martha and Michael Pennock to assess the population of
Victoria.
In the state of São Paulo, Brazil, Susan Andrews, through her organization Future Vision Ecological Park, used a version of Bhutan's GNH at a community level in some cities.
In Seattle, Washington, United States,
a version of the GNH Index was used by the Seattle City Council and
Sustainable Seattle to assess the happiness and well-being of the
Seattle Area population. Other cities and areas in North America, including Eau Claire, Wisconsin, Creston, British Columbia and the U.S. state of Vermont, also used a version of the GNH Index.
The state of Vermont's Governor declared April 13 (President
Jefferson's birthday) "Pursuit of Happiness Day", and became the first
state to pass legislation enabling development of alternative indicators
and to assist in making policy. The University of Vermont Center for
Rural Studies Vermont perform a periodic study of well-being in the
state.
At the University of Oregon, United States, a behavioral model of GNH based on the use of positive and negative words in social network status updates was developed by Adam Kramer.
In the Philippines, the concept of GNH has been lauded by various personalities, notably Philippine senator and UN Global Champion for Resilience Loren Legarda, and former environment minister Gina Lopez.
Bills have been filed in the Philippine Senate and House of
Representatives in support of Gross National Happiness in the
Philippines. Additionally, Executive Director of Bhutan's GNH Center,
Dr. Saamdu Chetri, has been invited by high-level officials in the
Philippines for a GNH Forum.
Many other cities and governments have undertaken efforts to measure happiness and well-being (also termed "Beyond GDP")
since the High Level Meeting in 2012, but have not used versions of
Bhutan's GNH index. Among these include the national governments of the United Kingdom's Office of National Statistics and the United Arab Emirates, and cities including Somerville, Massachusetts, United States, and Bristol, United Kingdom. Also a number of companies which are implementing sustainability practices in business that have been inspired by GNH.
The Bhutanese democratic
government started from 2008. Before then, the government practiced
massive ethnic cleansing of the non-Buddhist population of ethnic Nepalese of Hindu faith in the name of GNH cultural preservation. The NGOHuman Rights Watch documented the events. According to Human Rights Watch, "Over 100,000 or 1/6 of the population of Bhutan of Nepalese origin and Hindu faith were expelled from the country because they would not integrate with Bhutan's Buddhist culture."
The Refugee Council of Australia stated that "it is extraordinary and
shocking that a nation can get away with expelling one sixth of its
people and somehow keep its international reputation largely intact. The
Government of Bhutan should be known not for Gross National Happiness
but for Gross National Hypocrisy."
Some researchers state that Bhutan's GNH philosophy "has evolved
over the last decade through the contribution of western and local
scholars to a version that is more democratic
and open. Therefore, probably, the more accurate historical reference
is to mention the coining of the GNH phrase as a key event, but not the
Bhutan GNH philosophy, because the philosophy as understood by western
scholars is different from the philosophy used by the King at the time."
Other viewpoints are that GNH is a process of development and learning,
rather than an objective norm or absolute end point. Bhutan aspires to
enhance the happiness of its people and GNH serves as a measurement tool
for realizing that aspiration.
Other criticism focuses on the standard of living in Bhutan. In an article written in 2004 in the Economist magazine,
"The Himalayan kingdom of Bhutan is not in fact an idyll in a fairy
tale. It is home to perhaps 900,000 people most of whom live in grinding
poverty." Other criticism of GNH cites "increasing levels of political corruption, the rapid spread of diseases such as AIDS and tuberculosis, gang violence, abuses against women and ethnic minorities, shortages in food/medicine, and economic woes."
The economics of happiness or happiness economics is the theoretical, qualitative and quantitative study of happiness and quality of life, including positive and negative affects, well-being, life satisfaction and related concepts – typically tying economics more closely than usual with other social sciences, like sociology and psychology,
as well as physical health. It typically treats subjective
happiness-related measures, as well as more objective quality of life
indices, rather than wealth, income or profit, as something to be
maximized.
The field has grown substantially since the late 20th century,
for example by the development of methods, surveys and indices to
measure happiness and related concepts, as well as quality of life. Happiness findings have been described as a challenge to the theory and practice of economics.
Nevertheless, furthering gross national happiness, as well as a
specified Index to measure it, has been adopted explicitly in the Constitution of Bhutan in 2008, to guide its economic governance.
Subject classifications
The
subject may be categorized in various ways, depending on specificity,
intersection, and cross-classification. For example, within the Journal of Economic Literature classification codes, it has been categorized under:
Welfare economics at JEL: D63 – Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Health, education, and welfare at JEL: I31 – General Welfare; Basic needs; Living standards; Quality of life; Happiness
Given its very nature, reported happiness is subjective. It is difficult to compare one person's happiness with another's. It can be especially difficult to compare happiness across cultures.
However, many happiness economists believe they have solved this
comparison problem. Cross-sections of large data samples across nations
and time demonstrate consistent patterns in the determinants of
happiness.
Happiness is typically measured using subjective measures – e.g.
self-reported surveys – and/or objective measures. One concern has
always been the accuracy and reliability of people's responses to happiness surveys.
Objective measures such as lifespan, income, and education are often
used as well as or instead of subjectively reported happiness, though
this assumes that they generally produce happiness, which while
plausible may not necessarily be the case. The terms quality of life or well-being are often used to encompass these more objective measures.
Micro-econometric happiness equations have the standard form: . In this equation is the reported well-being of individual at time , and is a vector of known variables, which include socio-demographic and socioeconomic characteristics.
Macro-econometric happiness has been gauged by some as Gross National Happiness, following Sicco Mansholt's 1972 introduction of the measure,
and by others as a Genuine Wealth index. Anielski in 2008 wrote a
reference definition on how to measure five types of capital: (1) human;
(2) social; (3) natural; (4) built; and (5) financial.
Happiness, well-being, or satisfaction with life, was seen as unmeasurable in classical and neo-classical economics. Van Praag
was the first person who organized large surveys in order to explicitly
measure welfare derived from income. He did this with the Income
Evaluation Question (IEQ). This approach is called the Leyden School.
It is named after the Dutch university where this approach was
developed. Other researchers included Arie Kapteyn and Aldi Hagenaars.
Some scientists claim that happiness can be measured both
subjectively and objectively by observing the joy center of the brain
lit up with advanced imaging, although this raises philosophical issues, for example about whether this can be treated as more reliable than reported subjective happiness.
Determinants
GDP and GNP
Typically national financial measures, such as gross domestic product (GDP) and gross national product
(GNP), have been used as a measure of successful policy. There is a
significant association between GDP and happiness, with citizens in
wealthier nations being happier than those in poorer nations. In 2002, researchers argued that this relationship extends only to an average GDP per capita of about $15,000. In the 2000s, several studies have obtained the opposite result, so this Easterlin paradox is controversial.
Individual income
Historically,
economists have said that well-being is a simple function of income.
However, it has been found that once wealth reaches a subsistence level,
its effectiveness as a generator of well-being is greatly diminished.
Happiness economists hope to change the way governments view well-being
and how to most effectively govern and allocate resources given this
paradox.
In 2010, Daniel Kahneman and Angus Deaton
found that higher earners generally reported better life satisfaction,
but people's day-to-day emotional well-being only rose with earnings
until a threshold annual household pre-tax income of $75,000.
This particular study by Kahneman and Deaton showed the relationship
between experienced happiness and the maximum amount of income at
$75,000. Experienced happiness is the happiness received on a daily
basis-"the frequency and intensity of experiences of joy, fascination,
anxiety, sadness, anger, and affection that make one's life pleasant or
unpleasant." The other finding from Kahneman and Deaton is there is no
evidence supporting a maximum income to what is called reflective
happiness. This data is supported by the use of the Cantrill Ladder and
revealed that there is a direct relationship between income and
reflective happiness. This can conclude, to a point, that money does
buy happiness.
Other factors have been suggested as making people happier than money.
A short term course of psychological therapy is 32 times more cost
effective at increasing happiness than simply increasing income.
Scholars at the University of Virginia, University of British
Columbia and Harvard University released a study in 2011 after examining
numerous academic paper in response to an apparent contradiction: "When
asked to take stock of their lives, people with more money report being
a good deal more satisfied. But when asked how happy they are at the
moment, people with more money are barely different than those with
less." Published in the Journal of Consumer Psychology, the study
is entitled "If Money Doesn't Make You Happy, Then You Probably Aren't
Spending It Right" and included the following eight general
recommendations:
Spend money on "experiences" rather than goods.
Donate money to others, including charities, rather than spending it solely on oneself.
Spend small amounts of money on many small, temporary pleasures rather than less often on larger ones.
Don't spend money on "extended warranties and other forms of overpriced insurance."
Adjust one's mindset to "pay now, consume later," instead of "consume now, pay later."
Exercise circumspection about the day-to-day consequences of a purchase beforehand.
Rather than buying products that provide the "best deal," make purchases based on what will facilitate well-being.
Seek out the opinions of other people who have prior experience of a product before purchasing it.
In their "Unhappy Cities" paper, Edward Glaeser, Joshua Gottlieb and
Oren Ziv examined the self-reported subjective well-being of people
living in American metropolitan areas, particularly in relation to the
notion that "individuals make trade-offs among competing objectives,
including but not limited to happiness." The researchers findings
revealed that people living in metropolitan areas where lower levels of
happiness are reported are receiving higher real wages, and they suggest
in their conclusion that "humans are quite understandably willing to
sacrifice both happiness and life satisfaction if the price is right."
Social security
Ruut Veenhoven
claimed that social security payments do not seem to add to happiness.
This may be due to the fact that non-self-earned income (e.g., from a
lottery) does not add to happiness in general either.[citation needed]
Happiness may be the mind's reward for a useful action. However, Johan
Norberg of CIS, a free enterprise economy think tank, presents a
hypothesis that as people who think that they themselves control their
lives are happier, paternalist institutions may decrease happiness.
An alternative perspective focuses on the role of the welfare
state as an institution that improves quality of life not only by
increasing the extent to which basic human needs are met, but also by
promoting greater control of one's life by limiting the degree to which
individuals find themselves at the mercy of impersonal market forces
that are indifferent to the fate of individuals. This is the argument
suggested by the U.S. political scientist Benjamin Radcliff,
who has presented a series of papers in peer-reviewed scholarly
journals demonstrating that a more generous welfare state contributes to
higher levels of life satisfaction, and does so to rich and poor alike.
Employment
Generally, the well-being of those who are employed is higher than those who are unemployed.
Employment itself may not increase subjective well-being, but
facilitates activities that do (such as supporting a family,
philanthropy, and education). While work does increase well-being
through providing income, income level is not as indicative of
subjective well-being as other benefits related to employment.
Feelings of autonomy and mastery, found in higher levels in the
employed than unemployed, are stronger predictors of subjective
well-being than wealth.
When personal preference and the amount of time spent working do
not align, both men and women experience a decrease in subjective
well-being.
The negative effect of working more or working less than preferred has
been found across multiple studies, most finding that working more than
preferred (over-employed) is more detrimental, but some found that
working less (under-employed) is more detrimental.
Most individuals' levels of subjective well-being returned to "normal"
(level previous to time mismatch) within one year. Levels remained lower
only when individuals worked more hours than preferred for a period of
two years or more, which may indicate that it is more detrimental to be
over-employed than under-employed in the long-term.
Employment status effects are not confined to the individual.
Being unemployed can have detrimental effects on a spouse's subjective
well-being, compared to being employed or not working (and not looking
for work).
Partner life satisfaction is inversely related to the number of hours
their partner is underemployed. When both partners are underemployed,
the life-satisfaction of men is more greatly diminished than women. However, just being in a relationship reduces the impact unemployment has on the subjective well-being of an individual. On a broad scale, high rates of unemployment negatively affect the subjective well-being of the employed.
Becoming self-employed can increase subjective well-being, given
the right conditions. Those who leave work to become self-employed
report greater life satisfaction than those who work for others or
become self-employed after unemployment; this effect increases over
time.
Those who are self-employed and have employees of their own report
higher life-satisfaction than those who are self-employed without
employees, and women who are self-employed without employees report a
higher life satisfaction than men in the same condition.
The effects of retirement on subjective well-being vary depending
on personal and cultural factors. Subjective well-being can remain
stable for those who retire from work voluntarily, but declines for
those who are involuntarily retired. In countries with an average social norm to work,
the well-being of men increases after retirement, and the well-being of
retired women is at the same level as women who are homemakers or work
outside the home. In countries with a strong social norm to work, retirement negatively impacts the well-being of men and women.
Relationships and children
In
the 1970s, women typically reported higher subjective well-being than
did men. By 2009, declines in reported female happiness had eroded a
gender gap.
In rich societies, where a rise in income doesn't equate to an
increase in levels of subjective well-being, personal relationships are
the determining factors of happiness.
Glaeser, Gottlieb and Ziv suggest in their conclusion that the
happiness trade-offs that individuals seem willing to make aligns with
the tendency of parents to report less happiness, as they sacrifice
their personal well-being for the "price" of having children.
Freedom and control
There is a significant correlation between feeling in control of one's own life and happiness levels.
A study conducted at the University of Zurich suggested that democracy and federalism bring well-being to individuals.
It concluded that the more direct political participation
possibilities available to citizens raises their subjective well-being.
Two reasons were given for this finding. First, a more active role
for citizens enables better monitoring of professional politicians by
citizens, which leads to greater satisfaction with government output.
Second, the ability for citizens to get involved in and have control
over the political process, independently increases well-being.
American psychologist Barry Schwartz argues in his book The Paradox of Choice that too many consumer and lifestyle choices can produce anxiety and unhappiness due to analysis paralysis and raised expectations of satisfaction.
Much of the research regarding happiness and leisure relies on subjective well-being
(SWB) as an appropriate measure of happiness. Research has demonstrated
a wide variety of contributing and resulting factors in the
relationship between leisure and happiness. These include psychological
mechanisms, and the types and characteristics of leisure activities that
result in the greatest levels of subjective happiness. Specifically,
leisure may trigger five core psychological mechanisms including
detachment-recovery from work, autonomy in leisure, mastery of leisure
activities, meaning-making in leisure activities, and social affiliation
in leisure (DRAMMA).
Leisure activities that are physical, relational, and performed
outdoors are correlated with greater feelings of satisfaction with free
time.
Research across 33 different countries shows that individuals who feel
they strengthen social relationships and work on personal development
during leisure time are happier than others.
Furthermore, shopping, reading books, attending cultural events,
getting together with relatives, listening to music and attending
sporting events is associated with higher levels of happiness. Spending
time on the internet or watching TV is not associated with higher levels
of happiness as compared to these other activities.
Research has shown that culture influences how we measure
happiness and leisure. While SWB is a commonly used measure of happiness
in North America and Europe, this may not be the case internationally. Quality of life
(QOL) may be a better measure of happiness and leisure in Asian
countries, especially Korea. Countries such as China and Japan may
require a different measurement of happiness, as societal differences
may influence the concept of happiness (i.e. economic variables, cultural practices, and social networks) beyond what QOL is able to measure.
There seem to be some differences in leisure preference
cross-culturally. Within the Croatian culture, family related leisure
activities may enhance SWB across a large spectrum of ages ranging from
adolescent to older adults, in both women and men. Active socializing
and visiting cultural events are also associated with high levels of SWB
across varying age and gender.
Italians seem to prefer social conceptions of leisure as opposed to
individualistic conceptions. Although different groups of individuals
may prefer varying types and amount of leisure activity, this
variability is likely due to the differing motivations and goals that an
individual intends to fulfill with their leisure time.
Research suggests that specific leisure interventions enhance feelings of SWB. This is both a top-down and bottom-up effect, in that leisure satisfaction causally affects SWB, and SWB causally affects leisure satisfaction.
This bi-directional effect is stronger in retired individuals than in
working individuals. Furthermore, it appears that satisfaction with our
leisure at least partially explains the relationship between our
engagement in leisure and our SWB.
Broadly speaking, researchers classify leisure into active (e.g.
volunteering, socializing, sports and fitness) and passive leisure (e.g.
watching television and listening to the radio).
Among older adults, passive leisure activities and personal leisure
activities (e.g. sleeping, eating, and bathing) correlate with higher
levels of SWB and feelings of relaxation than active leisure activities.
Thus, although significant evidence has demonstrated that active
leisure is associated with higher levels of SWB, or happiness, this may
not be the case with older populations.
Both regular and irregular involvement in sports leisure can
result in heightened SWB. Serious, or systematic involvement in certain
leisure activities, such as taekwondo, correlates with personal growth and a sense of happiness.
Additionally, more irregular (e.g. seasonal) sports activities, such as
skiing, are also correlated with high SWB. Furthermore, the
relationship between pleasure and skiing is thought to be caused in part
by a sense of flow and involvement with the activity.
Leisure activities, such as meeting with friends, participating in
sports, and going on vacation trips, positively correlate with life
satisfaction.
It may also be true that going on a vacation makes our lives seem
better, but does not necessarily make us happier in the long term.
Research regarding vacationing or taking a holiday trip is mixed.
Although the reported effects are mostly small, some evidence points to
higher levels of SWB, or happiness, after taking a holiday.
Poverty alleviation are associated with happier populations. According
to the latest systematic review of the economic literature on life
satisfaction: Volatile or high inflation is bad for a population's
well-being, particularly those with a right-wing political orientation.
That suggests the impact of disruptions to economic security are in
part mediated or modified by beliefs about economic security.
Political stability
The Voxeu
analysis of the economic determinants of happiness found that life
satisfaction explains the largest share of an existing government's vote
share, followed by economic growth, which itself explains six times as
much as employment and twice as much as inflation.
Economic freedom
Individualistic societies have happier populations. Institutes of economic freedom are associated with increases wealth inequality but does not necessarily contribute to decreases in aggregate well-being or subjective well-being at the population level. In fact, income inequality enhances global well-being.
There is some debate over whether living in poor neighbours make one
happier. And, living among rich neighbours can dull the happiness that
comes from wealth. This is purported to work by way of an upward or
downward comparison effect (Keeping up with the Joneses). The balance of evidence
is trending in favour of the hypothesis that living in poor
neighbourhoods makes one less happy, and living in rich neighbourhoods
actually makes one happier, in the United States. While social status
matters, a balance of factors like amenities, safe areas, well
maintained housing, turn the tide in favour of the argument that richer
neighbours are happier neighbours.
Democracy
"The
right to participate in the political process, measured by the extent
of direct democratic rights across regions, is strongly correlated with
subjective well-being (Frey and Stutzer, 2002) ... a potential mechanism that explains this relationship is the perception of procedural fairness and social mobility." Institutions and well-being, democracy and federalism are associated with a happier population. Correspondingly, political engagement and activism have associated health benefits.
On the other hand, some non-democratic countries such as China and Saudi
Arabia top the Ipsos list of countries where the citizenry is most
happy with their government's direction.
That suggests that voting preferences may not translate well into
overall satisfaction with the government's direction. In any case, both
of these factors revealed preference and domain specific satisfaction
rather than overall subjective well being.
Economic development
Historically, economists thought economic growth was unrelated to population level well-being, a phenomenon labelled the Easterlin paradox. More robust research has identified that there is a link between economic development and the wellbeing of the population.
A <2017 meta-analysis shows that the impact of infrastructure expenditure on economic growth varies considerably.
So, one cannot assume an infrastructure project will yield welfare
benefits. The paper doesn't investigate or elaborate on any modifiable
variables that might predict the value of a project. However, government
spending on roads and primary industries is the best value target for
transport spending, according to a 2013 meta-analysis.
7%+/−3% per annum discount rates are typically applied as the discount rate on public infrastructure projects in Australia. Smaller real discount rates are used internationally to calculate the social return on investment by governments.
Alternative approach: economic consequences of happiness
While
the mainstream happiness economics has focused on identifying the
determinants of happiness, an alternative approach in the discipline
examines instead what are the economic consequences of happiness.
Happiness may act as a determinant of economic outcomes: it increases
productivity, predicts one's future income and affects labour market
performance. There is a growing number of studies justifying the so-called "happy-productive worker" thesis. The positive and causal impact of happiness on an individual's productivity has been established in experimental studies.
Related studies
The Satisfaction with Life Index
is an attempt to show the average self-reported happiness in different
nations. This is an example of a recent trend to use direct measures of
happiness, such as surveys asking people how happy they are, as an
alternative to traditional measures of policy success such as GDP or
GNP. Some studies suggest that happiness can be measured effectively. The Inter-American Development Bank (IDB), published in November 2008 a major study on happiness economics in Latin America and the Caribbean.
There are also several examples of measures that include self-reported happiness as one variable. Happy Life Years, a concept brought by Dutch sociologist Ruut Veenhoven, combines self-reported happiness with life expectancy. The Happy Planet Index combines it with life expectancy and ecological footprint.
Gross National Happiness (GNH) is a concept introduced by the King of Bhutan in 1972 as an alternative to GDP. Several countries have already developed or are in the process of developing such an index.
Bhutan's index has led that country to limit the amount of
deforestation it will allow and to require that all tourists to its
nation must spend US$200 Allegedly, low-budget tourism and deforestation lead to unhappiness.
After the military coup of 2006, Thailand also instituted an index. The stated promise of the new Prime Minister Surayud Chulanont is to make the Thai people not only richer but happier as well. Much like GDP results, Thailand releases monthly GNH data. The Thai GNH index is based on a 1–10 scale with 10 being the happiest. As of 13 May 2007, the Thai GNH measured 5.1 points.
The index uses poll data from the population surveying various
satisfaction factors such as security, public utilities, good
governance, trade, social justice, allocation of resources, education
and community problems.
Australia, China, France and the United Kingdom are also coming up with indexes to measure national happiness. The UK began to measure national wellbeing in 2012. North Korea also announced an international Happiness Index in 2011 through Korean Central Television. North Korea itself came in second, behind #1 China.
Canada released the Canadian Index of Wellbeing (CIW) in 2011 to track
changes in wellbeing. The CIW has adopted the following working
definition of wellbeing: The presence of the highest possible quality of
life in its full breadth of expression focused on but not necessarily
exclusive to good living standards, robust health, a sustainable
environment, vital communities, an educated populace, balanced time use,
high levels of democratic participation, and access to and
participation in leisure and culture
Ecuador's and Bolivia's new constitutions state the indigenous concept of "good life" ("buen vivir" in Spanish, "sumak kawsay" in Quichua, and "suma qamaña" in Aymara) as the goal of sustainable development.
Neoclassical economics
Neoclassical, as well as classical economics, are not subsumed under the term happiness economics
although the original goal was to increase the happiness of the people.
Classical and neoclassical economics are stages in the development of welfare economics
and are characterized by mathematical modeling. Happiness economics
represents a radical break with this tradition. The measurement of subjective happiness respectively life satisfaction by means of survey research
across nations and time (in addition to objective measures like
lifespan, wealth, security etc.) marks the beginning of happiness
economics.
Criticism
Some have suggested that establishing happiness as a metric is only meant to serve political goals. Recently there has been concern that happiness research could be used to advance authoritarian aims.
As a result, some participants at a happiness conference in Rome have
suggested that happiness research should not be used as a matter of
public policy but rather used to inform individuals.
Even on the individual level, there is discussion on how much
effect external forces can have on happiness. Less than 3% of an
individual's level of happiness comes from external sources such as
employment, education level, marital status, and socioeconomic status. To go along with this, four of the Big Five Personality Traits are substantially associated with life satisfaction, openness to experience is not associated. Having high levels of internal locus of control leads to higher reported levels of happiness.
Even when happiness can be affected by external sources, it has high hedonic adaptation,
some specific events such as an increase in income, disability,
unemployment, and loss (bereavement) only have short-term (about a year)
effects on a person's overall happiness and after a while happiness may
return to levels similar to unaffected peers.
What has the most influence over happiness are internal factors
such as genetics, personality traits, and internal locus of control. It
is theorized that 50% of the variation in happiness levels is from
genetic sources and is known as the genetic set point. The genetic set
point is assumed to be stable over time, fixed, and immune to influence
or control. This goes along with findings that well-being surveys have a naturally positive baseline.
With such strong internal forces on happiness, it is hard to have
an effect on a person's happiness externally. This in turn lends
itself back to the idea that establishing a happiness metric is only for
political gain and has little other use. To support this even further
it is believed that a country aggregate level of SWB can account for
more variance in government vote share than standard macroeconomic
variables, such as income and employment.
Technical issues
According
to Bond and Lang (2018), the results are skewed due to the fact that
the respondents have to "round" their true happiness to the scale of,
e.g., 3 or 7 alternatives (e.g., very happy, pretty happy, not too
happy). This "rounding error" may cause a less happy group seem happier,
in the average. This would not be the case if the happiness of both
groups would be normally distributed with the same variance, but that is usually not the case, based on their results. For some not-implausible log-normal assumptions on the scale, typical results can be reversed to the opposite results.
They also show that the "reporting function" seems to be
different for different groups and even for the same individual at
different times. For example, when a person becomes disabled, they soon
start to lower their threshold for a given answer (e.g., "pretty
happy"). That is, they give a higher answer than they would have given
at the same happiness state before becoming disabled
In the study of psychology, neuroticism has been considered a fundamental personality trait. In the Big Five approach
to personality trait theory, individuals with high scores for
neuroticism are more likely than average to be moody and to experience
such feelings as anxiety, worry, fear, anger, frustration, envy, jealousy, pessimism, guilt, depressed mood, and loneliness. Such people are thought to respond worse to stressors
and are more likely to interpret ordinary situations, such as minor
frustrations, as appearing hopelessly difficult. The responses can
include maladaptive behaviors, such as dissociation, procrastination, substance use, etc., which aids in relieving the negative emotions and generating positive ones.
Neuroticism is a trait in many models within personality theory, but there is significant disagreement on its definition. It is sometimes defined as a tendency for quick arousal
when stimulated and slow relaxation from arousal, especially with
regard to negative emotional arousal. Another definition focuses on
emotional instability and negativity or maladjustment, in contrast to
emotional stability and positivity, or good adjustment. It has also been
defined in terms of lack of self-control, poor ability to manage psychological stress, and a tendency to complain. Various personality tests
produce numerical scores, and these scores are mapped onto the concept
of "neuroticism" in various ways, which has created some confusion in
the scientific literature, especially with regard to sub-traits or "facets".
Individuals who score low in neuroticism tend to be more
emotionally stable and less reactive to stress. They tend to be calm,
even-tempered, and less likely to feel tense or rattled. Although they
are low in negative emotion, they are not necessarily high in positive
emotion. Being high in scores of positive emotion is generally an
element of the independent trait of extraversion.
Neurotic extraverts, for example, would experience high levels of both
positive and negative emotional states, a kind of "emotional roller
coaster".
Measurement
Like other personality traits, neuroticism is typically viewed as a continuous dimension rather than a discrete state.
The extent of neuroticism is generally assessed using self-report measures, although peer-reports and third-party observation can also be used. Self-report measures are either lexical or based on statements. Deciding which measure of either type to use in research is determined by an assessment of psychometric properties and the time and space constraints of the study being undertaken.
Lexical measures use individual adjectives that reflect neurotic
traits, such as anxiety, envy, jealousy, and moodiness, and are very
space and time efficient for research purposes. Lewis Goldberg (1992) developed a 20-word measure as part of his 100-word Big Five markers. Saucier (1994) developed a briefer 8-word measure as part of his 40-word mini-markers. Thompson (2008) systematically revised these measures to develop the International English Mini-Markers which has superior validity and reliability in populations both within and outside North America. Internal consistency
reliability of the International English Mini-Markers for the
Neuroticism (emotional stability) measure for native English-speakers is
reported as 0.84, and that for non-native English-speakers is 0.77.
Statement measures tend to comprise more words, and hence consume
more research instrument space, than lexical measures. Respondents are
asked the extent to which they, for example, "Remain calm under
pressure", or "Have frequent mood swings".
While some statement-based measures of neuroticism have similarly
acceptable psychometric properties in North American populations to
lexical measures, their generally emic development makes them less suited to use in other populations.
For instance, statements in colloquial North American English like
"feeling blue" or "being down in the dumps" are sometimes hard for
non-native English-speakers to understand.
Neuroticism has also been studied from the perspective of Gray's biopsychological theory of personality, using a scale that measures personality along two dimensions: the behavioural inhibition system (BIS) and the behavioural activation system (BAS
The BIS is thought to be related to sensitivity to punishment as well
as avoidance motivation, while the BAS is thought to be related to
sensitivity to reward as well as approach motivation. Neuroticism has
been found to be positively correlated with the BIS scale, and
negatively correlated with the BAS scale.
Neuroticism has been included as one of the four dimensions that comprise core self-evaluations, one's fundamental appraisal of oneself, along with locus of control, self-efficacy, and self-esteem. The concept of core self-evaluations was first examined by Judge, Locke, and Durham (1997), and since then evidence has been found to suggest these have the ability to predict several work outcomes, specifically, job satisfaction and job performance.
There is a risk of selection bias
in surveys of neuroticism; a 2012 review of N-scores said that "many
studies used samples drawn from privileged and educated populations".
Neuroticism is highly correlated with the startle reflex
in response to fearful conditions and inversely correlated with it in
response to disgusting or repulsive stimuli. This suggests that
Neuroticism may increase vigilance where evasive action is possible but
promote emotional blunting when escape is not an option.
A measure of the startle reflex can be used to predict the trait
neuroticism with good accuracy; a fact that is thought by some to
underlie the neurological basis of the trait. The startle reflex is a
reflex in response to a loud noise that one typically has no control
over, though anticipation can reduce the effect. The strength of the
reflex as well as the time until the reflex ceases can be used to
predict both neuroticism and extraversion.
Mental disorder correlations
Questions used in many neuroticism scales overlap with instruments used to assess mental disorders like anxiety disorders (especially social anxiety disorder) and mood disorders (especially major depressive disorder), which can sometimes confound
efforts to interpret N scores and makes it difficult to determine
whether each of neuroticism and the overlapping mental disorders might
cause the other, or if both might stem from other causes. Correlations
can be identified.
A 2013 meta-analysis found that a wide range of clinical mental
disorders are associated with elevated levels of neuroticism compared to
levels in the general population. It found that high neuroticism is predictive for the development of anxiety disorders, major depressive disorder, psychosis, and schizophrenia, and is predictive but less so for substance use and non-specific mental distress. These associations are smaller after adjustment for elevated baseline symptoms of the mental illnesses and psychiatric history.
Neuroticism has also been found to be associated with older age.
In 2007, Mroczek & Spiro found that among older men, upward trends
in neuroticism over life as well as increased neuroticism overall both
contributed to higher mortality rates.
Mood disorders
Disorders associated with elevated neuroticism include mood disorders, such as depression and bipolar disorder, anxiety disorders, eating disorders, schizophrenia and schizoaffective disorder, dissociative identity disorder, and hypochondriasis. Mood disorders tend to have a much larger association with neuroticism than most other disorders.
The five big studies have described children and adolescents with high
neuroticism as "anxious, vulnerable, tense, easily frightened, 'falling
apart' under stress, guilt-prone, moody, low in frustration tolerance,
and insecure in relationships with others", which includes both traits
concerning the prevalence of negative emotions as well as the response
to these negative emotions. Neuroticism in adults similarly was found to be associated with the frequency of self-reported problems.
These associations can vary with culture: for example, Adams
found that among upper-middle-class American teenaged girls, neuroticism
was associated with eating disorders and self-harm, but among Ghanaian
teenaged girls, higher neuroticism was associated with magical thinking
and extreme fear of enemies.
Personality disorders
A 2004 meta-analysis attempted to analyze personality disorders
in light of the five-factor personality theory and failed to find
meaningful discriminations; it did find that elevated neuroticism is
correlated with many personality disorders.
Theories of causation
Mental-noise hypothesis
Studies have found that the mean reaction times
will not differ between individuals high in neuroticism and those low
in neuroticism, but that, with individuals high in neuroticism, there is
considerably more trial-to-trial variability in performance reflected
in reaction time standard deviations.
In other words, on some trials neurotic individuals are faster than
average, and on others they are slower than average. It has been
suggested that this variability reflects noise in the individual's
information processing systems or instability of basic cognitive
operations (such as regulation processes), and further that this noise
originates from two sources: mental preoccupations and reactivity
processes.
Flehmig et al. (2007) studied mental noise in terms of everyday behaviours using the Cognitive Failures Questionnaire, which is a self-report measure of the frequency of slips and lapses of attention. A "slip" is an error by commission, and a "lapse" is an error by omission. This scale was correlated with two well-known measures of neuroticism, the BIS/BAS scale and the Eysenck Personality Questionnaire.
Results indicated that the CFQ-UA (Cognitive Failures Questionnaire-
Unintended Activation) subscale was most strongly correlated with
neuroticism (r = .40)
and explained the most variance (16%) compared to overall CFQ scores,
which only explained 7%. The authors interpret these findings as
suggesting that mental noise is "highly specific in nature" as it is
related most strongly to attention slips triggered endogenously by associative memory. In other words, this may suggest that mental noise is mostly task-irrelevant cognitions such as worries and preoccupations.
The theory of evolution may also explain differences in personality. For example, one of the evolutionary approaches to depression
focuses on neuroticism and finds that heightened reactivity to negative
outcomes may have had a survival benefit, and that furthermore a
positive relationship has been found between neuroticism level and
success in university with the precondition that the negative effects of
neuroticism are also successfully coped with.
Likewise, a heightened reactivity to positive events may have had
reproductive advantages, selecting for heightened reactivity generally.
Nettle contends that evolution selected for higher levels of
neuroticism until the negative effects of neuroticism outweighed its
benefits, resulting in selection for a certain optimal level of
neuroticism. This type of selection will result in a normal distribution
of neuroticism, so the extremities of the distribution will be
individuals with excessive neuroticism or too low neuroticism for what
is optimal, and the ones with excessive neuroticism would therefore be
more vulnerable to the negative effects of depression, and Nettle gives
this as the explanation for the existence of depression rather than
hypothesizing, as others have, that depression itself has any
evolutionary benefit.
Some research has found that neuroticism, in modern societies, is
positively correlated with reproductive success in females but not in
males. A possible explanation may be that neuroticism in females comes
at the expense of formal education (which is correlated with lower
fertility) and correlates with unplanned and adolescent pregnancies.
Terror management theory
According to terror management theory (TMT) neuroticism is primarily caused by insufficient anxiety buffers against unconscious death anxiety. These buffers consist of:
Cultural worldviews that impart life with a sense of enduring
meaning, such as social continuity beyond one's death, future legacy and
afterlife beliefs.
A sense of personal value, or the self-esteem in the cultural worldview context, an enduring sense of meaning.
While TMT agrees with standard evolutionary psychology accounts that the roots of neuroticism in Homo sapiens or its ancestors are likely in adaptive sensitivities to negative outcomes, it posits that once Homo sapiens achieved a higher level of self-awareness, neuroticism increased enormously, becoming largely a spandrel,
a non-adaptive byproduct of our adaptive intelligence, which resulted
in a crippling awareness of death that threatened to undermine other
adaptive functions. This overblown anxiety thus needed to be buffered
via intelligently creative, but largely fictitious and arbitrary notions
of cultural meaning and personal value. Since highly religious or
supernatural conceptions of the world provide "cosmic" personal
significance and literal immortality,
they are deemed to offer the most efficient buffers against death
anxiety and neuroticism. Thus, historically, the shift to more
materialistic and secular cultures—starting in the neolithic, and culminating in the industrial revolution—is deemed to have increased neuroticism.
Genetic and environmental factors
A
2013 review found that "Neuroticism is the product of the interplay
between genetic and environmental influences. Heritability estimates
typically range from 40% to 60%."
The effect size of these genetic differences remain largely the same
throughout development, but the hunt for any specific genes that control
neuroticism levels has "turned out to be difficult and hardly
successful so far."
On the other hand, with regards to environmental influences,
adversities during development such as "emotional neglect and sexual
abuse" were found to be positively associated with neuroticism. However, "sustained change in neuroticism and mental health are rather rare or have only small effects."
In the July 1951 article: "The Inheritance of Neuroticism" by Hans J. Eysenck and Donald Prell
it was reported that some 80 per cent of individual differences in
neuroticism are due to heredity and only 20 percent are due to
environment....the factor of neuroticism is not a statistical artifact,
but constitutes a biological unit which is inherited as a
whole....neurotic predisposition is to a large extent hereditarily
determined.
In children and adolescents, psychologists speak of temperamentalnegative affectivity that, during adolescence, develops into the neuroticism personality domain. Mean neuroticism levels change throughout the lifespan as a function of personality maturation and social roles, but also the expression of new genes. Neuroticism in particular was found to decrease as a result of maturity by decreasing through age 40 and then leveling off. Generally speaking, the influence of environments on neuroticism increases over the lifespan, although people probably select and evoke experiences based on their neuroticism levels.
The emergent field of "imaging genetics", which investigates the
role of genetic variation in the structure and function of the brain,
has studied certain genes suggested to be related to neuroticism, and
the one studied so far concerning this topic has been the serotonin
transporter-linked promoter region gene known as 5-HTTLPR, which is
transcribed into a serotonin transporter that removes serotonin.
It has been found that compared to the long (l) variant of 5-HTTLPR,
the short (s) variant has reduced promoter activity, and the first study
on this subject has shown that the presence of the s-variant 5-HTTLPR
has been found to result in higher amygdala activity from seeing angry
or fearful faces while doing a non-emotional task, with further studies
confirming that the s-variant 5-HTTLPR result greater amygdala activity
in response to negative stimuli, but there have also been null findings.
A meta-analysis of 14 studies has shown that this gene has a moderate
effect size and accounts for 10% of the phenotypic difference. However,
the relationship between brain activity and genetics may not be
completely straightforward due to other factors, with suggestions made
that cognitive control and stress may moderate the effect of the gene.
There are two models that have been proposed to explain the type of
association between the 5-HTTLPR gene and amygdala activity: the "phasic
activation" model proposes that the gene controls amygdala activity
levels in response to stress, whereas the "tonic activation" model, on
the other hand, proposes that the gene controls baseline amygdala
activity. Another gene that has been suggested for further study to be
related to neuroticism is the catechol-O-methyltransferase (COMT) gene.
The anxiety and maladaptive stress responses that are aspects of
neuroticism have been the subject of intensive study. Dysregulation of hypothalamic–pituitary–adrenal axis and glucocorticoid system, and influence of different versions of the serotonin transporter and 5-HT1A receptor genes may influence the development of neuroticism in combination with environmental effects like the quality of upbringing.
Neuroimaging studies with fMRI have had mixed results, with some finding that increased activity in the amygdala and anterior cingulate cortex,
brain regions associated with arousal, is correlated with high
neuroticism scores, as is activation of the associations have also been
found with the medial prefrontal cortex, insular cortex, and hippocampus, while other studies have found no correlations.
Further studies have been conducted trying to tighten experimental
design by using genetics to add additional differentiation among
participants, as well as twin study models.
A related trait, behavioral inhibition, or "inhibition to the
unfamiliar", has received attention as the trait concerning withdrawal
or fear from unfamiliar situations, which is generally measured through
observation of child behavior in response to, for example, encountering
unfamiliar individuals. This trait in particular has been hypothesized
to be related to amygdala function, but the evidence so far has been
mixed.
Epidemiology
A research over large samples has shown that levels of neuroticism are higher in women than men. Neuroticism is also found to decrease slightly with age.
The same study noted that no functional MRI studies have yet been
performed to investigate these differences, calling for more research.
A 2010 review found personality differences between genders to be
between "small and moderate", the largest of those differences being in
the traits of agreeableness and neuroticism.
Many personality traits were found to have had larger personality
differences between men and women in developed countries compared to
less developed countries, and differences in three traits—extraversion,
neuroticism, and people-versus-thing orientation—showed differences that
remained consistent across different levels of economic development,
which is also consistent with the "possible influence of biologic
factors." Three cross-cultural studies have revealed higher levels of female neuroticism across almost all nations.
A 2016 review investigated the geographic issue; it found that in US, neuroticism is highest in the mid-Atlantic states and southwards but declines westward, while openness to experience is highest in ethnically diverse regions of the mid-Atlantic, New England, the West Coast,
and cities. Likewise, in the UK neuroticism is lowest in urban areas.
Generally, geographical studies find correlations between low
neuroticism and entrepreneurship
and economic vitality and correlations between high neuroticism and
poor health outcomes. The review found that the causal relationship
between regional cultural and economic conditions and psychological
health is unclear.
A 2013 review found that a high level of neuroticism in young adults is a risk factor for triggering mood disorders. Neuroticism is also a possible risk factor for developing an addiction disorder to internet.
Investigation of the Instagram users showed the preference of cosmetic
products and intolerance of weapons among highly neurotic users.
There is a strong correlation between bruxism and neuroticism. More severe bruxism is associated with a higher degree of neuroticism.
Maladaptive (Risky) Behaviors
When
neuroticism is described as a personality trait that measures emotional
stability, research has indicated that it is also involved in
maladaptive behaviors to regulate an individual's emotions.
High levels of neuroticism in an individual is associated with anxiety
and overthinking, as well as irritability and impulsiveness. Studies have shown that individuals with higher levels of neuroticism
are associated with a shortened life span, a greater likelihood of
divorce, and a lack of education. To cope with the negative emotionality, these individuals may engage in maladaptive
forms of coping, such as procrastination, substance abuse, etc. With
these internal pressures, due to these negative emotions, neuroticism
often relates to difficulties with emotion regulation, leading to engagement in divergent (risky) behaviors.
Due to the facets associated with neuroticism, it can be viewed as a negative personality trait. A common perception of the personality trait most closely associated with risky behaviors is extraversion, due to the correlated adjectives such as adventurous, enthusiastic, and outgoing. These adjectives allow the individual to feel the positive emotions associated with risk-taking. However, neuroticism can also be a contributing factor, just for different reasons. As anxiety is one of the facets of neuroticism, it can lead to indulgence in anxiety-based maladaptive and risky behaviors.
Neuroticism is considerably stable over time, and research has shown
that individuals with higher levels of neuroticism may prefer short-term
solutions, such as risky behaviors, and neglect the long-term costs.
This is relevant to neuroticism because it is also associated with impulsivity.
One of the distinct traits of impulsivity is called urgency, which is a
predisposition to experiencing strong impulses that can lead to
impulsive behavior, while dealing with the negative emotions attached.
Urgency can be both negative and positive; positive urgency deals with
positive emotions and the contrast for negative urgency. Despite the negative emotions that are prominent in neuroticism,
research indicates that it is combination of the negative emotions
present, together with the positive emotions that are generated by the
engagement in maladaptive behaviors.
Affective forecasting (also known as hedonic forecasting, or the hedonic forecasting mechanism) is the prediction of one's affect (emotional state) in the future. As a process that influences preferences, decisions, and behavior, affective forecasting is studied by both psychologists and economists, with broad applications.
History
In The Theory of Moral Sentiments (1759), Adam Smith observed the personal challenges, and social benefits, of hedonic forecasting errors:
[Consider t]he poor man's son, whom heaven in its anger
has visited with ambition, when he begins to look around him, admires
the condition of the rich …. and, in order to arrive at it, he devotes
himself for ever to the pursuit of wealth and greatness…. Through the
whole of his life he pursues the idea of a certain artificial and
elegant repose which he may never arrive at, for which he sacrifices a
real tranquillity that is at all times in his power, and which, if in
the extremity of old age he should at last attain…, he will find to be
in no respect preferable to that humble security and contentment which
he had abandoned for it. It is then, in the last dregs of life, his body
wasted with toil and diseases, his mind galled and ruffled by the
memory of a thousand injuries and disappointments..., that he begins at
last to find that wealth and greatness are mere trinkets of frivolous
utility….
[Yet] it is well that nature imposes upon us in this manner. It is this
deception which rouses and keeps in continual motion the industry of
mankind.
In the early 1990s, Kahneman and Snell began research on hedonic forecasts, examining its impact on decision making. The term "affective forecasting" was later coined by psychologists Timothy Wilson and Daniel Gilbert.
Early research tended to focus solely on measuring emotional forecasts,
while subsequent studies began to examine the accuracy of forecasts,
revealing that people are surprisingly poor judges of their future
emotional states. For example, in predicting how events like winning the lottery might affect their happiness,
people are likely to overestimate future positive feelings, ignoring
the numerous other factors that might contribute to their emotional
state outside of the single lottery event. Some of the cognitive biases related to systematic errors in affective forecasts are focalism, hot-cold empathy gap, and impact bias.
Applications
While
affective forecasting has traditionally drawn the most attention from
economists and psychologists, their findings have in turn generated
interest from a variety of other fields, including happiness research, law, and health care. Its effect on decision-making and well-being is of particular concern to policy-makers and analysts in these fields, although it also has applications in ethics.
For example, one's tendency to underestimate one's ability to adapt to
life-changing events has led to legal theorists questioning the
assumptions behind tort damage compensation. Behavioral economists have incorporated discrepancies between forecasts and actual emotional outcomes into their models of different types of utility and welfare. This discrepancy also concerns healthcare analysts, in that many important health decisions depend upon patients' perceptions of their future quality of life.
Overview
Affective forecasting can be divided into four components: predictions about valence (i.e. positive or negative), the specific emotions experienced, their duration, and their intensity.
While errors may occur in all four components, research overwhelmingly
indicates that the two areas most prone to bias, usually in the form of
overestimation, are duration and intensity.
Immune neglect is a form of impact bias in response to negative events,
in which people fail to predict how much their recovery will be
hastened by their psychological immune system. The psychological
immune system is a metaphor "for that system of defenses that helps you
feel better when bad things happen", according to Gilbert. On average, people are fairly accurate about predicting which emotions they will feel in response to future events. However, some studies indicate that predicting specific emotions in response to more complex social
events leads to greater inaccuracy. For example, one study found that
while many women who imagine encountering gender harassment predict
feelings of anger, in reality, a much higher proportion report feelings
of fear. Other research suggests that accuracy in affective forecasting is greater for positive affect than negative affect,
suggesting an overall tendency to overreact to perceived negative
events. Gilbert and Wilson posit that this is a result of the
psychological immune system.
While affective forecasts take place in the present moment, researchers also investigate its future outcomes.
That is, they analyze forecasting as a two-step process, encompassing a
current prediction as well as a future event. Breaking down the present
and future stages allow researchers to measure accuracy, as well as
tease out how errors occur. Gilbert and Wilson, for example, categorize
errors based on which component they affect and when they enter the
forecasting process. In the present phase of affective forecasting, forecasters bring to mind a mental representation
of the future event and predict how they will respond emotionally to
it. The future phase includes the initial emotional response to the
onset of the event, as well as subsequent emotional outcomes, for
example, the fading of the initial feeling.
When errors occur throughout the forecasting process, people are
vulnerable to biases. These biases disable people from accurately
predicting their future emotions. Errors may arise due to extrinsic factors, such as framing effects, or intrinsic ones, such as cognitive biases or expectation effects.
Because accuracy is often measured as the discrepancy between a
forecaster's present prediction and the eventual outcome, researchers
also study how time affects affective forecasting. For example, the tendency for people to represent distant events differently from close events is captured in the construal level theory.
The finding that people are generally inaccurate affective
forecasters has been most obviously incorporated into conceptualizations
of happiness and its successful pursuit, as well as decision making across disciplines. Findings in affective forecasts have stimulated philosophical and ethical debates, for example, on how to define welfare. On an applied level, findings have informed various approaches to healthcare policy, tort law, consumer decision making, and measuring utility.
Newer and conflicting evidence suggests that intensity bias in
affective forecasting may not be as strong as previous research
indicates. Five studies, including a meta-analysis, recover evidence
that overestimation in affective forecasting is partly due to the
methodology of past research. Their results indicate that some
participants misinterpreted specific questions in affective forecasting
testing. For example, one study found that undergraduate students tended
to overestimate experienced happiness levels when participants were
asked how they were feeling in general with and without reference to the election, compared to when participants were asked how they were feeling specifically
in reference to the election. Findings indicated that 75%-81% of
participants who were asked general questions misinterpreted them.
After clarification of tasks, participants were able to more accurately
predict the intensity of their emotions
Major sources of errors
Because forecasting errors commonly arise from literature on cognitive processes,
many affective forecasting errors derive from and are often framed as
cognitive biases, some of which are closely related or overlapping
constructs (e.g. projection bias and empathy gap). Below is a list of commonly cited cognitive processes that contribute to forecasting errors.
One of the most common sources of error in affective forecasting
across various populations and situations is impact bias, the tendency
to overestimate the emotional impact of a future event, whether in terms
of intensity or duration. The tendencies to overestimate intensity and duration are both robust and reliable errors found in affective forecasting.
One study documenting impact bias examined college students
participating in a housing lottery. These students predicted how happy
or unhappy they would be one year after being assigned to either a
desirable or an undesirable dormitory. These college students predicted
that the lottery outcomes would lead to meaningful differences in their
own level of happiness, but follow-up questionnaires revealed that
students assigned to desirable or undesirable dormitories reported
nearly the same levels of happiness. Thus, differences in forecasts overestimated the impact of the housing assignment on future happiness.
Some studies specifically address "durability bias," the tendency
to overestimate the length of time future emotional responses will
last.
Even if people accurately estimate the intensity of their future
emotions, they may not be able to estimate their duration. Durability
bias is generally stronger in reaction to negative events.
This is important because people tend to work toward events they
believe will cause lasting happiness, and according to durability bias,
people might be working toward the wrong things. Similar to impact bias, durability bias causes a person to overemphasize where the root cause of their happiness lies.
Impact bias is a broad term and covers a multitude of more
specific errors. Proposed causes of impact bias include mechanisms like immune neglect, focalism, and misconstruals. The pervasiveness of impact bias in affective forecasts is of particular concern to healthcare
specialists, in that it affects both patients' expectations of future
medical events as well as patient-provider relationships. (See health.)
Expectation effects
Previously
formed expectations can alter emotional responses to the event itself,
motivating forecasters to confirm or debunk their initial forecasts. In this way, the self-fulfilling prophecy
can lead to the perception that forecasters have made accurate
predictions. Inaccurate forecasts can also become amplified by
expectation effects. For example, a forecaster who expects a movie to be
enjoyable will, upon finding it dull, like it significantly less than a
forecaster who had no expectations.
Sense-making processes
Major
life events can have a huge impact on people's emotions for a very long
time but the intensity of that emotion tends to decrease with time, a
phenomenon known as emotional evanescence. When making forecasts, forecasters often overlook this phenomenon. Psychologists have suggested that emotion does not decay over time predictably like radioactive isotopes but that the mediating factors are more complex.
People have psychological processes that help dampen emotions.
Psychologists have proposed that surprising, unexpected, or unlikely
events cause more intense emotional reactions. Research suggests that
people are unhappy with randomness
and chaos and that they automatically think of ways to make sense of an
event when it is surprising or unexpected. This sense-making helps
individuals recover from negative events more quickly than they would
have expected.
This is related to immune neglect in that when these unwanted acts of
randomness occur people become upset and try to find meaning or ways to
cope with the event. The way that people try to make sense of the
situation can be considered a coping strategy made by the body. This
idea differs from immune neglect due to the fact that this is more of a
momentary idea. Immune neglect tries to cope with the event before it
even happens.
One study documents how sense-making processes decrease emotional
reactions. The study found that a small gift produced greater emotional
reactions when it was not accompanied by a reason than when it was,
arguably because the reason facilitated the sense-making process,
dulling the emotional impact of the gift. Researchers have summarized
that pleasant feelings are prolonged after a positive situation if
people are uncertain about the situation.
People fail to anticipate that they will make sense of events in a
way that will diminish the intensity of the emotional reaction. This
error is known as ordinization neglect.
For example, ("I will be ecstatic for many years if my boss agrees to
give me a raise") an employee might believe, especially if the employee
believes the probability of a raise was unlikely. Immediately after
having the request approved, the employee may be thrilled but with time
the employees make sense of the situation (e.g., "I am a very hard
worker and my boss must have noticed this") thus dampening the emotional
reaction.
Immune neglect
Gilbert et al. originally coined the term immune neglect (or immune bias)
to describe a function of the psychological immune system, which is the
set of processes that restore positive emotions after the experience of
negative emotions. Immune neglect is people's unawareness of their tendency to adapt to and cope with negative events.
Unconsciously the body will identify a stressful event and try to cope
with the event or try to avoid it. Bolger & Zuckerman found that
coping strategies vary between individuals and are influenced by their
personalities.
They assumed that since people generally do not take their coping
strategies into account when they predict future events, that people
with better coping strategies should have a bigger impact bias or a
greater difference between their predicted and actual outcome. For
example, asking someone who is afraid of clowns
how going to a circus would feel may result in an overestimation of
fear because the anticipation of such fear causes the body to begin
coping with the negative event. Hoerger et al. examined this further by
studying college students' emotions toward football games. They found
that students who generally coped with their emotions instead of
avoiding them would have a greater impact bias when predicting how
they'd feel if their team lost the game. They found that those with
better coping strategies recovered more quickly. Since the participants
did not think about their coping strategies when making predictions,
those who actually coped had a greater impact bias. Those who avoided
their emotions, felt very closely to what they predicted they would.
In other words, students who were able to deal with their emotions were
able to recover from their feelings. The students were unaware that
their body was actually coping with the stress and this process made
them feel better than not dealing with the stress. Hoerger ran another
study on immune neglect after this, which studied both daters' and
non-daters' forecasts about Valentine's Day, and how they would feel in
the days that followed. Hoerger found that different coping strategies
would cause people to have different emotions in the days following
Valentine's Day, but participants' predicted emotions would all be
similar. This shows that most people do not realize the impact that
coping can have on their feelings following an emotional event. He also
found that not only did immune neglect create a bias for negative
events, but also for positive ones. This shows that people continually
make inaccurate forecasts because they do not take into account their
ability to cope and overcome emotional events. Hoerger proposed that coping styles and cognitive processes are associated with actual emotional reactions to life events.
A variant of immune neglect also proposed by Gilbert and Wilson is the region-beta paradox,
where recovery from more intense suffering is faster than recovery from
less intense experiences because of the engagement of coping systems.
This complicates forecasting, leading to errors.
Contrarily, accurate affective forecasting can also promote the
region-beta paradox. For example, Cameron and Payne conducted a series
of studies in order to investigate the relationship between affective
forecasting and the collapse of compassion phenomenon, which refers to the tendency for people's compassion to decrease as the number of people in need of help increases.
Participants in their experiments read about either 1 or a group of 8
children from Darfur. These researchers found that people who are
skilled at regulating their emotions tended to experience less
compassion in response to stories about 8 children from Darfur compared
to stories about only 1 child. These participants appeared to collapse
their compassion by correctly forecasting their future affective states
and proactively avoiding the increased negative emotions resulting from
the story. In order to further establish the causal role of proactive
emotional regulation in this phenomenon, participants in another study
read the same materials and were encouraged to either reduce or
experience their emotions. Participants instructed to reduce their
emotions reported feeling less upset for 8 children than for 1,
presumably because of the increased emotional burden and effort required
for the former (an example of the region-beta paradox).
These studies suggest that in some cases accurate affective forecasting
can actually promote unwanted outcomes such as the collapse of
compassion phenomenon by way of the region-beta paradox.
Positive vs negative affect
Research
suggests that the accuracy of affective forecasting for positive and
negative emotions is based on the distance in time of the forecast.
Finkenauer, Gallucci, van Dijk, and Pollman discovered that people show
greater forecasting accuracy for positive than negative affect when the
event or trigger being forecast is more distant in time.
Contrarily, people exhibit greater affective forecasting accuracy for
negative affect when the event/trigger is closer in time. The accuracy
of an affective forecast is also related to how well a person predicts
the intensity of his or her emotions. In regard to forecasting both
positive and negative emotions, Levine, Kaplan, Lench, and Safer have
recently shown that people can in fact predict the intensity of their
feelings about events with a high degree of accuracy.
This finding is contrary to much of the affective forecasting
literature currently published, which the authors suggest is due to a
procedural artifact in how these studies were conducted.
Another important affective forecasting bias is fading affect bias, in which the emotions associated with unpleasant memories fade more quickly than the emotion associated with positive events.
Focalism (or the "focusing illusion") occurs when people focus too much on certain details of an event, ignoring other factors. Research suggests that people have a tendency to exaggerate aspects of life when focusing their attention on it. A well-known example originates from a paper by Kahneman and Schkade, who coined the term "focusing illusion" in 1998.
They found that although people tended to believe that someone from the
Midwest would be more satisfied if they lived in California, results
showed equal levels of life satisfaction
in residents of both regions. In this case, concentrating on the easily
observed difference in weather bore more weight in predicting
satisfaction than other factors.
There are many other factors that could have contributed to the desire
to move to the Midwest, but the focal point for their decisions was
weather. Various studies have attempted to "defocus" participants,
meaning instead of focusing on that one factor, they tried to make the
participants think of other factors or look at the situation through a
different lens. There were mixed results dependent upon the methods
used. One successful study asked people to imagine how happy a winner of
the lottery and a recently diagnosed HIV patient would be.
The researchers were able to reduce the amount of focalism by exposing
participants to detailed and mundane descriptions of each person's life,
meaning that the more information the participants had on the lottery
winner and the HIV patient the less they were able to only focus on few
factors, these participants subsequently estimated similar levels of
happiness for the HIV patient as well as the lottery-winner. As for the
control participants, they made unrealistically disparate predictions of
happiness. This could be due to the fact that the more information that
is available, the less likely it is one will be able to ignore
contributory factors.
Time discounting (or time preference) is the tendency to weigh
present events over future events. Immediate gratification is preferred
to delayed gratification, especially over longer periods of time and
with younger children or adolescents.
For example, a child may prefer one piece of candy now (1 candy/0
seconds=infinity candies/second) instead of five pieces of candy in four
months (5 candies/10540800 seconds≈0.00000047candies/second). The
bigger the candies/second, the more people like it. This pattern is
sometimes referred to as hyperbolic discounting or "present bias"
because people's judgements are biased toward present events. Economists often cite time discounting as a source of mispredictions of future utility.
Memory
Affective forecasters often rely on memories
of past events. When people report memories of past events they may
leave out important details, change things that occurred, and even add
things that have not happened. This suggests the mind constructs
memories based on what actually happened, and other factors including
the person's knowledge, experiences, and existing schemas.
Using highly available, but unrepresentative memories, increases the
impact bias. Baseball fans, for example, tend to use the best game they
can remember as the basis for their affective forecast of the game they
are about to see. Commuters are similarly likely to base their forecasts
of how unpleasant it would feel to miss a train on their memory of the
worst time they missed the train. Various studies indicate that retroactive assessments of past experiences are prone to various errors, such as duration neglect or decay bias. People tend to overemphasize the peaks and ends of their experiences when assessing them (peak/end bias),
instead of analyzing the event as a whole. For example, in recalling
painful experiences, people place greater emphasis on the most
discomforting moments as well as the end of the event, as opposed to
taking into account the overall duration.
Retroactive reports often conflict with present-moment reports of
events, further pointing to contradictions between the actual emotions experienced during an event and the memory of them. In addition to producing errors in forecasts about the future, this discrepancy has incited economists to redefine different types of utility and happiness (see the section on economics).
Another problem that can arise with affective forecasting is that
people tend to remember their past predictions inaccurately. Meyvis,
Ratner, and Levav predicted that people forget how they predicted an
experience would be beforehand, and thought their predictions were the
same as their actual emotions. Because of this, people do not realize
that they made a mistake in their predictions, and will then continue to
inaccurately forecast similar situations in the future. Meyvis et al.
ran five studies to test whether or not this is true. They found in all
of their studies, when people were asked to recall their previous
predictions they instead write how they currently feel about the
situation. This shows that they do not remember how they thought they
would feel, and makes it impossible for them to learn from this event
for future experiences.
Misconstruals
When
predicting future emotional states people must first construct a good
representation of the event. If people have a lot of experience with the
event then they can easily picture the event. When people do not have
much experience with the event they need to create a representation of
what the event likely contains.
For example, if people were asked how they would feel if they lost one
hundred dollars in a bet, gamblers are more likely to easily construct
an accurate representation of the event. "Construal level theory"
theorizes that distant events are conceptualized more abstractly than
immediate ones. Thus, psychologists suggest
that a lack of concrete details prompts forecasters to rely on more
general or idealized representations of events, which subsequently leads
to simplistic and inaccurate predictions.
For example, when asked to imagine what a 'good day' would be like for
them in the near future, people often describe both positive and
negative events. When asked to imagine what a 'good day' would be like
for them in a year, however, people resort to more uniformly positive
descriptions. Gilbert and Wilson call bringing to mind a flawed representation of a forecasted event the misconstrual problem. Framing effects, environmental context, and heuristics (such as schemas) can all affect how a forecaster conceptualizes a future event. For example, the way options are framed affects how they are represented: when asked to forecast future levels of happiness
based on pictures of dorms they may be assigned to, college students
use physical features of the actual buildings to predict their emotions.
In this case, the framing of options highlighted visual aspects of
future outcomes, which overshadowed more relevant factors to happiness,
such as having a friendly roommate.
Projection bias
Overview
Projection bias is the tendency to falsely project current preferences onto a future event.
When people are trying to estimate their emotional state in the future
they attempt to give an unbiased estimate. However, people's assessments
are contaminated by their current emotional state. Thus, it may be
difficult for them to predict their emotional state in the future, an
occurrence known as mental contamination.
For example, if a college student was currently in a negative mood
because he just found out he failed a test, and if the college student
forecasted how much he would enjoy a party two weeks later, his current
negative mood may influence his forecast. In order to make an accurate
forecast the student would need to be aware that his forecast is biased
due to mental contamination, be motivated to correct the bias, and be
able to correct the bias in the right direction and magnitude.
Projection bias can arise from empathy gaps (or hot/cold empathy gaps),
which occur when the present and future phases of affective forecasting
are characterized by different states of physiological arousal, which
the forecaster fails to take into account.
For example, forecasters in a state of hunger are likely to
overestimate how much they will want to eat later, overlooking the
effect of their hunger on future preferences. As with projection bias,
economists use the visceral motivations that produce empathy gaps to
help explain impulsive or self-destructive behaviors, such as smoking.
An important affective forecasting bias related to projection
bias is personality neglect. Personality neglect refers to a person's
tendency to overlook their personality when making decisions about their
future emotions. In a study conducted by Quoidbach and Dunn, students'
predictions of their feelings about future exam scores were used to
measure affective forecasting errors related to personality. They found
that college students who predicted their future emotions about their
exam scores were unable to relate these emotions to their own
dispositional happiness. To further investigate personality neglect, Quoidbach and Dunn studied happiness in relation to neuroticism. People predicted their future feelings about the outcome of the 2008 US presidential election between Barack Obama and John McCain.
Neuroticism was correlated with impact bias, which is the
overestimation of the length and intensity of emotions. People who rated
themselves as higher in neuroticism overestimated their happiness in
response to the election of their preferred candidate, suggesting that
they failed to relate their dispositional happiness to their future
emotional state.
The term "projection bias" was first introduced in the 2003 paper "Projection Bias in Predicting Future Utility" by Loewenstein, O'Donoghue and Rabin.
Market applications of projection bias
The
novelty of new products oftentimes overexcites consumers and results in
the negative consumption externality of impulse buying. To counteract
such, George Loewenstein recommends offering "cooling off"
periods for consumers. During such, they would have a few days to
reflect on their purchase and appropriately develop a longer-term
understanding of the utility they receive from it. This cooling-off
period could also benefit the production side by diminishing the need
for a salesperson to "hype" certain products. Transparency between
consumers and producers would increase as "sellers will have an
incentive to put buyers in a long-run average mood rather than an
overenthusiastic state".
By implementing Loewentstein's recommendation, firms that understand
projection bias should minimize information asymmetry; such would
diminish the negative consumer externality that comes from purchasing an
undesirable good and relieve sellers from extraneous costs required to
exaggerate the utility of their product.
Life-cycle consumption
Projection bias influences the life cycle of consumption. The
immediate utility obtained from consuming particular goods exceeds the
utility of future consumption. Consequently, projection bias causes "a
person to (plan to) consume too much early in life and too little late
in life relative to what would be optimal".
Graph 1 displays decreasing expenditures as a percentage of total
income from 20 to 54. The period following where income begins to
decline can be explained by retirement. According to Loewenstein's
recommendation, a more optimal expenditure and income distribution is
displayed in Graph 2. Here, income is left the same as in Graph 1, but
expenditures are recalculated by taking the average percentage of
expenditures in terms of income from ages 25 to 54 (77.7%) and
multiplying such by income to arrive at a theoretical expenditure. The
calculation is only applied to this age group because of unpredictable
income before 25 and after 54 due to school and retirement.
Food waste
When buying food, people often wrongly project what they will want to eat in the future when they go shopping, which results in food waste.
Major sources of error in motivation
Motivated reasoning
Generally,
affect is a potent source of motivation. People are more likely to
pursue experiences and achievements that will bring them more pleasure
than less pleasure. In some cases, affective forecasting errors appear
to be due to forecasters' strategic use of their forecasts as a means to
motivate them to obtain or avoid the forecasted experience. Students,
for example, might predict they would be devastated if they failed a
test as a way to motivate them to study harder for it. The role of
motivated reasoning in affective forecasting has been demonstrated in
studies by Morewedge and Buechel (2013).
Research participants were more likely to overestimate how happy they
would be if they won a prize, or achieved a goal, if they made an
affective forecast while they could still influence whether or not they
achieved it than if they made an affective forecast after the outcome
had been determined (while still in the dark about whether they knew if
they won the prize or achieved the goal).
Research
in affective forecasting errors complicates conventional
interpretations of utility maximization, which presuppose that to make rational decisions, people must be able to make accurate forecasts about future experiences or utility. Whereas economics formerly focused largely on utility in terms of a person's preferences (decision utility), the realization that forecasts are often inaccurate suggests that measuring preferences at a time of choice may be an incomplete concept of utility. Thus, economists such as Daniel Kahneman, have incorporated differences between affective forecasts and later outcomes into corresponding types of utility. Whereas a current forecast reflects expected or predicted utility, the actual outcome of the event reflects experienced utility. Predicted utility is the "weighted average of all possible outcomes under certain circumstances." Experienced utility refers to the perceptions of pleasure and pain associated with an outcome.
Kahneman and Thaler provide an example of "the hungry shopper," in
which case the shopper takes pleasure in the purchase of food due to
their current state of hunger. The usefulness of such purchasing is
based on their current experience and their anticipated pleasure in
fulfilling their hunger.
Decision making
Affective forecasting is an important component of studying human decision making. Research in affective forecasts and economic decision making include investigations of durability bias in consumers and predictions of public transit satisfaction.
In relevance to the durability bias in consumers, a study was conducted
by Wood and Bettman, that showed that people make decisions regarding
the consumption of goods based on the predicted pleasure, and the
duration of that pleasure, that the goods will bring them.
Overestimation of such pleasure, and its duration, increases the
likelihood that the good will be consumed. Knowledge on such an effect
can aid in the formation of marketing strategies of consumer goods.
Studies regarding the predictions of public transit satisfaction reveal
the same bias. However, with a negative impact on consumption, due to
their lack of experience with public transportation, car users predict
that they will receive less satisfaction with the use of public
transportation than they actually experience. This can lead them to
refrain from the use of such services, due to inaccurate forecasting. Broadly, the tendencies people have to make biased forecasts deviate from rational models of decision making.
Rational models of decision making presume an absence of bias, in favor
of making comparisons based on all relevant and available information.
Affective forecasting may cause consumers to rely on the feelings
associated with consumption rather than the utility of the good itself.
One application of affective forecasting research is in economic policy. The knowledge that forecasts, and therefore, decisions, are affected by biases as well as other factors (such as framing effects), can be used to design policies that maximize the utility of people's choices. This approach is not without its critics, however, as it can also be seen to justify economic paternalism.
Prospect theory describes how people make decisions. It differs from expected utility theory in that it takes into account the relativity of how people view utility and incorporates loss aversion, or the tendency to react more strongly to losses rather than gains.
Some researchers suggest that loss aversion is in itself an affective
forecasting error since people often overestimate the impact of future
losses.
Happiness and well-being
Economic definitions of happiness are tied to concepts of welfare and utility,
and researchers are often interested in how to increase levels of
happiness in the population. The economy has a major influence on the
aid that is provided through welfare programs because it provides
funding for such programs.
Many welfare programs are focused on providing assistance with the
attainment of basic necessities such as food and shelter.
This may be due to the fact that happiness and well-being are best
derived from personal perceptions of one's ability to provide these
necessities. This statement is supported by research that states after
basic needs have been met, income has less of an impact on perceptions
of happiness. Additionally, the availability of such welfare programs
can enable those that are less fortunate to have additional
discretionary income. Discretionary income
can be dedicated to enjoyable experiences, such as family outings, and
in turn, provides an additional dimension to their feelings and
experience of happiness. Affective forecasting provides a unique
challenge to answering the question regarding the best method for
increasing levels of happiness, and economists are split between offering more choices to maximize happiness, versus offering experiences that contain more objective or experienced utility. Experienced utility refers to how useful an experience is in its contribution to feelings of happiness and well-being.
Experienced utility can refer to both material purchases and
experiential purchases. Studies show that experiential purchases, such
as a bag of chips, result in forecasts of higher levels of happiness
than material purchases, such as the purchase of a pen.
This prediction of happiness as a result of a purchase experience
exemplifies affective forecasting. It is possible that an increase in
choices, or means, of achieving desired levels of happiness will be
predictive of increased levels of happiness. For example, if one is
happy with their ability to provide themselves with both a choice of
necessities and a choice of enjoyable experiences they are more likely
to predict that they will be happier than if they were forced to choose
between one or the other. Also, when people are able to reference
multiple experiences that contribute to their feelings of happiness,
more opportunities for comparison will lead to a forecast of more
happiness.
Under these circumstances, both the number of choices and the quantity
of experienced utility have the same effect on affective forecasting,
which makes it difficult to choose a side of the debate on which method
is most effective in maximizing happiness.
Applying findings from affective forecasting research to
happiness also raises methodological issues: should happiness measure
the outcome of an experience or the satisfaction experienced as a result
of the choice made based upon a forecast? For example, although
professors may forecast that getting tenure would significantly increase
their happiness, research suggests that in reality, happiness levels
between professors who are or are not awarded tenure are insignificant.
In this case happiness is measured in terms of the outcome of an
experience. Affective forecasting conflicts such as this one have also
influenced theories of hedonic adaptation, which compares happiness to a treadmill, in that it remains relatively stable despite forecasts.
In law
Similar to how some economists have drawn attention to how affective forecasting violates assumptions of rationality,
legal theorists point out that inaccuracies in, and applications of,
these forecasts have implications in law that have remained overlooked.
The application of affective forecasting, and its related research, to
legal theory reflects a wider effort to address how emotions affect the
legal system. In addition to influencing legal discourse on emotions, and welfare, Jeremy Blumenthal cites additional implications of affective forecasting in tort damages, capital sentencing and sexual harassment.
Tort damages
Jury awards for tort
damages are based on compensating victims for pain, suffering, and loss
of quality of life. However, findings in affective forecasting errors
have prompted some to suggest that juries are overcompensating victims
since their forecasts overestimate the negative impact of damages on the
victims' lives.
Some scholars suggest implementing jury education to attenuate
potentially inaccurate predictions, drawing upon research that
investigates how to decrease inaccurate affective forecasts.
Capital sentencing
During
the process of capital sentencing, juries are allowed to hear victim
impact statements (VIS) from the victim's family. This demonstrates
affective forecasting in that its purpose is to present how the victim's
family has been impacted emotionally and, or, how they expect to be
impacted in the future. These statements can cause juries to
overestimate the emotional harm,
causing harsh sentencing, or underestimate harm, resulting in
inadequate sentencing. The time frame in which these statements are
present also influences affective forecasting. By increasing the time
gap between the crime itself and sentencing (the time at which victim
impact statements are given), forecasts are more likely to be influenced
by the error of immune neglect (See Immune neglect)
Immune neglect is likely to lead to underestimation of future emotional
harm, and therefore results in inadequate sentencing. As with tort
damages, jury education is a proposed method for alleviating the
negative effects of forecasting error.
Sexual harassment
In cases involving sexual harassment, judgements are more likely to blame the victim
for their failure to react in a timely fashion or their failure to make
use of services that were available to them in the event of sexual
harassment. This is because prior to the actual experience of
harassment, people tend to overestimate their affective reactions as
well as their proactive reactions in response to sexual harassment. This
exemplifies the focalism error (See Focalism)
in which forecasters ignore alternative factors that may influence
one's reaction, or failure to react. For example, in their study,
Woodzicka and LaFrance studied women's predictions of how they would
react to sexual harassment during an interview. Forecasters
overestimated their affective reactions of anger, while underestimating
the level of fear they would experience. They also overestimated their
proactive reactions. In Study 1, participants reported that they would
refuse to answer questions of a sexual nature and, or, report the
question to the interviewer's supervisor. However, in Study 2, of those
who had actually experienced sexual harassment during an interview, none
of them displayed either proactive reaction.
If juries are able to recognize such errors in forecasting, they may be
able to adjust such errors. Additionally, if juries are educated on
other factors that may influence the reactions of those who are victims
of sexual harassment, such as intimidation, they are more likely to make
more accurate forecasts, and less likely to blame victims for their own
victimization.
In health
Affective forecasting has implications in health decision making and medical ethics and policy. Research in health-related affective forecasting suggests that nonpatients consistently underestimate the quality of life associated with chronic health conditions and disability. The so-called "disability paradox" states the discrepancy between self-reported levels of happiness
amongst chronically ill people versus the predictions of their
happiness levels by healthy people. The implications of this forecasting
error in medical decision making can be severe, because judgments about
future quality of life often inform health decisions. Inaccurate
forecasts can lead patients, or more commonly their health care agent,
to refuse life-saving treatment in cases when the treatment would
involve a drastic change in lifestyle, for example, the amputation of a
leg. A patient, or health care agent, who falls victim to focalism
would fail to take into account all the aspects of life that would
remain the same after losing a limb. Although Halpern and Arnold suggest
interventions to foster awareness of forecasting errors and improve
medical decision making amongst patients, the lack of direct research in
the impact of biases in medical decisions provides a significant
challenge.
Research also indicates that affective forecasts about future
quality of life are influenced by the forecaster's current state of health.
Whereas healthy individuals associate future low health with low
quality of life, less healthy individuals do not forecast necessarily
low quality of life when imagining having poorer health. Thus, patient
forecasts and preferences about their own quality of life may conflict with public notions. Because a primary goal of healthcare
is maximizing quality of life, knowledge about patients' forecasts can
potentially inform policy on how resources are allocated.
Some doctors suggest that research findings in affective forecasting errors merit medical paternalism. Others argue that although biases exist and should support changes in doctor-patient communication, they do not unilaterally diminish decision-making capacity and should not be used to endorse paternalistic policies. This debate captures the tension between medicine's emphasis on protecting the autonomy of the patient and an approach that favors intervention in order to correct biases.
Improving forecasts
Individuals who recently have experienced an emotionally charged life event will display the impact bias.
The individual predicts they will feel happier than they actually feel
about the event. Another factor that influences overestimation is focalism which causes individuals to concentrate on the current event. Individuals often fail to realize that other events will also influence how they currently feel. Lam et al. (2005) found that the perspective that individuals take influences their susceptibility to biases when making predictions about their feelings.
A perspective that overrides impact bias is mindfulness. Mindfulness is a skill that individuals can learn to help them prevent overestimating their feelings.
Being mindful helps the individual understand that they may currently
feel negative emotions, but the feelings are not permanent. The Five Factor Mindfulness Questionnaire (FFMQ) can be used to measure an individual's mindfulness.
The five factors of mindfulness are observing, describing, acting with
awareness, non-judging of inner experience, and non-reactivity to inner
experience. The two most important factors for improving forecasts are observing and acting with awareness. The observing factor assesses how often an individual attends to their sensations, emotions, and outside environment.
The ability to observe allows the individual to avoid focusing on one
single event, and be aware that other experiences will influence their
current emotions.
Acting with awareness requires assessing how individuals tend to
current activities with careful consideration and concentration.
Emanuel, Updegraff, Kalmbach, and Ciesla (2010) stated that the ability
to act with awareness reduces the impact bias because the individual is
more aware that other events co-occur with the present event.
Being able to observe the current event can help individuals focus on
pursuing future events that provide long-term satisfaction and
fulfillment.