Money and Happiness: Is It A Matter of Focus?

More interesting research on the psychology of happiness and money (and dates and...)

American Association for the Advancement of Science journal *Science* (Vol. 312. no. 5782, June 30) includes a study: "Would You Be Happier If You Were Richer? A Focusing Illusion."

The article is by Daniel Kahneman, Alan B. Krueger, David Schkade,Norbert Schwarz, and Arthur A. Stone.

Here's how the article starts:

[begin excerpt]

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 asking 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 affect or 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. Although 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.

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. Standard survey questions on life satisfaction by which subjective well-being is measured may induce a form of focusing illusion, by drawing people's attention to their relative standing in the distribution of materialwell-being and other circumstances. More importantly, the focusing illusion may be a source of error in significant decisions that people make (4).

Evidence for the focusing illusion comes from diverse lines of research. For example, Strack and colleagues (5) reported an experiment in which students were asked: (i) "How happy are you with your life in general?" and (ii) "How many dates did you have last month?" The correlation between the answers to these questions was -0.012 (not statistically different from 0) when they were asked in the preceding order, but the correlation rose to 0.66 when the order was reversed with another sample
of students. The dating question evidently caused that aspect of life to become salient and its importance to be exaggerated when the respondents encountered the more general question about their happiness. Similar focusing effects were observed when attention was first called to respondents' marriage (6) or health (7). One conclusion from this research is that people do not know how happy or satisfied they are with their life in the way they know their height or telephone number. The answers to global life satisfaction questions are constructed only when asked (8), and are, therefore, susceptible to the focusing of attention on different aspects of life.

[end excerpt]

Here's another excerpt:  "The focusing illusion helps explain why the results of well-being research are often counter-intuitive. The false intuitions likely arise from a failure to recognize that people do not
continuously think about their circumstances, whether positive or negative. Schkade and Kahneman (9) noted that, 'Nothing in life is quite as important as you think it is while you are thinking about it.'
Individuals who have recently experienced a significant life change (e.g., becoming disabled, winning a lottery, or getting married) surely think of their new circumstances many times each day, but the allocation of attention eventually changes, so that they spend most of their time attending to and drawing pleasure or displeasure from experiences such as having breakfast or watching television (10). However, they are likely to be reminded of their status when prompted to answer a global judgment question such as, 'How satisfied are you with your life these days?'"

Here's how the article ends: "Despite the weak relation 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, 29). An emphasis on the role of attention helps to explain both why many people seek high income--because their predictions exaggerate the increase in happiness due to the focusing illusion--and why the long-term effect of income gains become relatively small, because
attention eventually shifts to less novel aspects of daily life."

The author note states that reprint requests may be sent to here.

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Comments

[Peter]

Not that I don’t like money, but…

Interesting timing for this article, L. I’ve just experienced a very clear and practical demonstration of the disconnect between money and life satisfaction. (At least MY disconnect between money and life satisfaction.)

I’ve recently been under a lot of stress that has caused my to miss a deadline in my freelance work and turn back work that I was looking forward to doing. The fact that the source of all that stress was the death of my mother means that I have inherited her entire estate. Not a great fortune, mind you, but enough to make the $3,000 paycheck I was expecting far less important than it might have been.

Did the lack of urgent need for the money lessen my anxiety at blowing a deadline and having to beg-off on other work? Not in the slightest. I imagine that my angst stems from violating my carefully nurtured image (and perhaps more to the point, “self-image”) of reliability and professionalism, more than from any potential financial consequences.

I’ve always thought that there were things more important to me than money. Now I know for sure what one of them is.

[Laura Young]

Well said, P. So sorry for the loss of your mother. You hit quite a few issues here between life and death and also how and why we do what we do in the way we do it. Much food for thought.