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Who’s the Happiest? Is it Economical?

From Michael Kruse… Michael here reflects on a TED lecture on happiness, and you might be interested in a piece I wrote on happiness a couple years back. But Michael has found a fascinating study on what it is that makes us happy.


How can we
best measure well-being? Are you an experience kind of happiness person? Or a story kind of happiness person? Which makes you happiesr?



How can we
best measure well-being?  An
economist will likely give you an analysis of gross domestic product (the
market value of all final goods and services produced within a year.) GDP is
frequently used as a proxy for well-being because strongly correlates with
material standard of living. Fair enough. But as many people rightly point out,
we aren’t simply material beings. More wealth doesn’t necessarily make you
better off. We need other measures. Some say we should measure happiness.


At first
blush this seems reasonable. Yet as behavioral economist Daniel Kahneman (2002 Nobel
Memorial Prize in Economic Sciences) points out in a recent TED seminar,
measuring happiness is more elusive than it first appears. In his video, The
riddle of experience vs. memory
, he identifies at least two ways happiness
is experienced.


We have two
selves who don’t evaluate happiness in the same way:


1.  Experiencing-Self – Lives completely in the moment … lives in a rolling three second window we experience as the present. Happiness is about happy moments. Happiness is about being happy in your life.


2. Remembering-Self – Keeps score and maintains the story of our lives. The remembering self is a storyteller. It abstracts from our experiences focusing on changes, significant moments, and endings, and then weaves them into a narrative. Happiness is about satisfaction with our story. Happiness is about being happy about your life.


Kahneman tells of a man who listened to a beautiful symphony. At the end there was a loud screeching sound. His friend remarked, “It ruined the whole symphony.” Well, not really. He had experienced twenty minutes of happy experiences followed by only one screeching moment. What was ruined was his memory of the experience.


Kahneman also tells about two patients who underwent the same medical procedure. Patient A had a shorter procedure that entailed significant pain. Patient B’s procedure took longer and featured more moments of pain that were as painful as patient A’s pain. But the moments of pain were less intense as the course of the procedure unfolded. Patient B, despite having had a lengthier series of painful moments, will usually report that he suffered less. How the story ends influences how we remember events and therefore it influences our happiness with our memory of the event.


As a thought experiment, Kahneman suggests we imagine we are planning a two week vacation. At the end of that vacation we know that all photographs and reminders of the vacation will be destroyed. A drug will be given that erases our memory. Would we still choose the same vacation? Most of us would not. Scientific research shows there is very little correlation between the happiness experienced by the two selves.


We often deny ourselves pleasurable experiences (or endure difficult experiences) in the present in an effort to shape ourselves in ways that brings happiness to the remembering-self. Conversely, our experiencing-self may find great happiness in the moment but our remembering-self may evaluate the event as foolish regarding the remembering-self’s narrative.


Kahneman’s basic point is that, as we make choices, “We don’t choose between experiences. We choose between memories of experiences. … We don’t think about our future as events but rather as anticipated memories.”


What does this mean for how wealth impacts our lives? Kahneman says that happiness for the experiencing-self increases with income up to about $60,000 (for Americans.) Beyond that, there is no correlation. “Money does not by you experiential happiness but lack of money certainly buys you misery.” However, there is a continuous correlation between happiness and income for the remembering-self. Income relates to how happy we feel about our lives. However, the most important factor in happiness appears to be spending time with people your like.


If we reflect carefully, we see that answers to the generic question, “Are you happy?” may not be useful in determining well-being. It is possible people to adapt and be happy in the midst of injustice when in fact they should be unhappy and seeking change. Unhappiness is often a prime motivator for innovation and change. But it is also possible that some people are unhappy because despite having material abundance their personal narrative is warped and unfulfilled.


What I find particularly intriguing is Kahneman’s idea of the remembering-self and narrative. His unstated implication is that if you change the story the remembering-self develops, then you change what makes the remembering-self happy. And if you change what makes the remembering-self happy, then you change the economic decisions the remembering-self is so influential in guiding.


What implications might Kahneman’s work have for us as we reflect on Christian formation, economic decision making, and witnessing to the Kingdom of God?

Comments read comments(7)
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Travis Greene

posted March 26, 2010 at 12:25 pm

Fascinating. I particularly like the line “We don’t choose between experiences. We choose between memories of experiences. … We don’t think about our future as events but rather as anticipated memories.”
I’m not entirely sure how to apply these ideas to wealth, other than to reiterate the very old observation that money =/= happiness. I also think GDP/wealth/income end up being proxy measures for stability; that which gives us peace to pursue meaningful personal/communal narratives.
Poverty, then, is not just or even primarily about material possessions, but about the (relative) freedom from chaos that materials wealth provides. The main problem isn’t eating rice & beans instead of steak, it’s not knowing where your next meal is coming from.
The vacation thought-experiment is interesting. I don’t know that I would want to take the vacation at all, if I can have no memory of it. Reminds me of “Eternal Sunshine of the Spotless Mind”.
The idea of our important selves being that which reorganizes our memories into a meaningful narratives ties in nicely to Christian virtue ethics (for instance, see Scot’s recent series on Tom Wright’s new book).

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posted March 26, 2010 at 1:33 pm

Michael Kruse advocating behavioral economics ?! What is this world coming to — that entire field is considered heresy to most folks like you with conservative economic leanings.
Dan Ariely (an actual behavioral economist — unlike Kahneman, who isn’t actually an economist) has done some work on these sorts of issues too, and its all very interesting. Ariely’s blog also outlines some research in the area of behavioral economics and religion, which some folks might find interesting.
I hadn’t thought about the implications of these issues as you’ve suggested, but I think its an interesting suggestion. If we change the way we remember — both as individuals and collectively as the church, we can alter the decisions we make going forward. If the church is able to combat the materialism narrative that many have by telling its own, very different narrative, maybe we can influence the decision our individual and collective “remembering selves” make.

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posted March 26, 2010 at 1:44 pm

Quantifying happiness? Swift is smiling in his grave.

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Michael W. Kruse

posted March 26, 2010 at 6:19 pm

EricG #2
My credentials as an orthodox conservative are considerably exaggerated. I suspect neither Limbaugh or Beck would have much use for my views if they pressed to deeply. :-)
One of the things this study highlights for me is helping people see their economic life in terms of a larger narrative. What I sense from too much of the church is either uncritical embrace of cultural narratives or overly pejorative views of the market place and what happens there. We need better narratives.

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John L

posted March 26, 2010 at 6:25 pm

Michael (and Scot) thanks for wrestling with this. Reminds me of something Robert Kennedy said shortly before his assassination,
??the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.?
Daniel’s TED Talk really inspired me and got me thinking about “value” in ways I had never considered. Not sure I can bring any new insights to the table here, but I think it’s important to recognize -how- we assign relative value in our lives, to be more aware of the subtle and often unconscious “value decisions” we make and why we make them. It really gets to the center of Mt6:21
I do perceive a direct correlation between social-behavioral psychology and economic decisions, which seems to be the foundation on which behavioral economics is built. Can these theories be extended into the religious theater? As ecclesia becomes defined more by self-organized global consensus (virtual networks) than denominational-institutional mandate, perhaps we’ll see something similar emerge: behavioral theology or behavioral ecclesiology?
Radical change occurs when a system becomes more a reflection of its users than its managers.
Also reminds me of a metric called ‘Gross National Happiness’ which seeks to correlate a country’s sense of well-being with more than materialism.

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posted March 26, 2010 at 8:13 pm

Michael —
I was, of course, just teasing about your endorsement of behavioral economics. But the more I think about it, don’t its conclusions seem to call into question some things you have advocated?
For example, one of the primary results from behavioral economists — including Kahneman — is the endowment effect (confirmed through experimental economics): People are usually irrational when it comes to over-valuing what they own. What does that say about our views about property rights?
Or take the general conclusion from behav. economics that much of classic economics is wrong because it (incorrectly) assumes people make rational decisions. Much of behavioral economics calls into question (a) the assumption that markets works as they should, because we don’t actually act rationality, and (b) the resulting conclusion of classic economics that government should therefore usually keep its hands off.

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posted March 28, 2010 at 10:30 am

So, we can change the narrative of our life story without changing the events, and voila! Happy life!
I’ll have to think this one over. I used to get such pleasure out of my self-pity, plots of revenge, and laments of ‘if only’. Thanks. You’ve ruined all that for me. I’ve always wondered why that kind of pleasure never lasted.
And now, you are implying that my worries about the future are putting me below the emotional poverty line! What’s next? Are you going to spoil my eating habits too?

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