“When peo­ple con­sider the impact of any sin­gle fac­tor on their well-being — not only income — they are prone to exag­ger­ate its impor­tance; we refer to this ten­dency as the focus­ing illusion”

Click Here To Read: Daniel Kah­ne­man ” Would You Be Hap­pier If You were Richer? A Focus­ing Illusion”

Intro­duc­tion (Via Princeton)

Most peo­ple believe that they would be hap­pier if they were richer, but sur­vey evi­dence on sub­jec­tive well-being is largely incon­sis­tent with that belief. Sub­jec­tive well-being is most com­monly mea­sured by ques­tions that ask peo­ple, “All things con­sid­ered, how sat­is­fied are you with your life as a whole these days?” or “Taken all together, would you say that you are very happy, pretty happy, or not too happy?” Such ques­tions elicit a global eval­u­a­tion of one’s life. An alter­na­tive method asks peo­ple to report their feel­ings in real time, which yields a mea­sure of expe­ri­enced hap­pi­ness. Sur­veys in many coun­tries con­ducted over decades indi­cate that, on aver­age, reported global judg­ments of life sat­is­fac­tion or hap­pi­ness have not changed much over the last four decades, in spite of large increases in real income per capita. While reported life sat­is­fac­tion and house­hold income are pos­i­tively cor­re­lated in a cross-section of peo­ple at a given time, increases in income have been found to have mainly a tran­si­tory effect on indi­vid­u­als’ reported life sat­is­fac­tion. (1–3) More­over, the cor­re­la­tion between income and sub­jec­tive well-being is weaker when a mea­sure of expe­ri­enced hap­pi­ness is used instead of a global mea­sure. This arti­cle reviews recent evi­dence that helps inter­pret these observations.

Addi­tional Excerpts (Via Princeton)

When peo­ple con­sider the impact of any sin­gle fac­tor on their well-being — not only income — they are prone to exag­ger­ate its impor­tance; we refer to this ten­dency as the focus­ing illu­sion. Income has even less effect on people’s moment-to-moment hedo­nic expe­ri­ences than on the judg­ment they make when asked to report their sat­is­fac­tion with their life or over­all hap­pi­ness. These find­ings sug­gest that the stan­dard sur­vey ques­tions by which sub­jec­tive well­be­ing is mea­sured (mainly by ask­ing respon­dents for a global judg­ment about their sat­is­fac­tion or hap­pi­ness with their life as a whole) may induce a form of focus­ing illu­sion, by draw­ing people’s atten­tion to their rel­a­tive stand­ing in the dis­tri­b­u­tion of mate­r­ial well-being. More impor­tantly, the focus­ing illu­sion may be a source of error in sig­nif­i­cant deci­sions that peo­ple make.

Despite the weak rela­tion­ship between income and global life sat­is­fac­tion or expe­ri­enced hap­pi­ness, many peo­ple are highly moti­vated to increase their income. In some cases, this focus­ing illu­sion may lead to a mis­al­lo­ca­tion of time, from accept­ing lengthy com­mutes (which are among the worst moments of the day) to sac­ri­fic­ing time spent social­iz­ing (which are among the best moments of the day). (28) An empha­sis on the role of atten­tion helps to explain both why many peo­ple seek high income – because they over pre­dict the increase in hap­pi­ness due to the focus­ing illu­sion and because changes in rel­a­tive income are asso­ci­ated with strong emo­tional responses – and why the long-term effects of these changes are rel­a­tively small — because atten­tion even­tu­ally shifts to less novel aspects of daily life.

Copy­right © Daniel Kah­ne­man, Prince­ton University

h/t: Simoleon Sense

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