PhD Seminar October 12, 2011 MKTG960-301 PhD Seminar October 12, 2011.
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Transcript of PhD Seminar October 12, 2011 MKTG960-301 PhD Seminar October 12, 2011.
MKTG960-301
PhD Seminar
October 12, 2011
Measuring Happiness Easterlin Paradox Kahneman & Deaton’ s Partial Solution
Affective forecasting errors
Today’s Agenda
Happiness
Very much
Not at all
Brickman et al. (1978)
Winners Controls Victims1
1.5
2
2.5
3
3.5
4
4.5
5
Twin study: Compared happiness ratings of fraternal and identical twin pairs (many scales including depression, etc)
Happiness of fraternal pairs unrelated Happiness of identical pairs associated
(approximately 50% of variation)
Genetic Components?
Economists use financial indicators Macro-level measures: GDP Micro-level measures: lifetime income
Measuring Happiness
as Economic Well-being
Gross National Happiness (GNH) was developed in an attempt to define an indicator that measures quality of life or social progress in more holistic and psychological terms than gross domestic product (GDP)
Psychologists initially measured happiness using questions about global life satisfaction Cantril Self-Anchored Life Evaluation
Ladder “How happy are you with your life in
general?” Global life satisfaction (Average= 6.75 on a 0-10
scale)
Measuring Happiness
as Overall Well-being or Life Satisfaction
20% 46% 27% 4% 2% 1% 0%
Self-Reports
Global Measures of Happiness
Diener, E., Emmons, R., Larsen, J., & Griffin, S. (1985). Below are five statements with which you may agree or disagree.
1 = strongly disagree 2 = disagree 3 = slightly disagree 4 = neither agree nor disagree 5 = slightly agree 6 = agree 7 = strongly agree
1. In most ways my life is close to my ideal. 2. The conditions of my life are excellent. 3. I am satisfied with my life. 4. So far I have gotten the important things I want in life. 5. If I could live my life over, I would change almost nothing.
How much greater happier are Californians than Midwesterners?
0.64 0.57
0.01
-3
-2
-1
0
1
2
3
CaliforniansMidwesterners Actual
Pre
dic
tio
ns
Measuring Happinessas Experienced Sampling
or Moment-to-moment ratings
Measuring Happinesswith the day reconstruction method
Activity Time spent (hours) Net affect Unh IndexIntimate relations 0.23 4.83 0.04Socializing after work 1.14 4.150.07Relaxing 2.17 3.96 0.08Dinner 0.81 3.94 0.07Lunch 0.57 3.91 0.08Exercise 0.22 3.85 0.09Praying/worship` 0.45 3.78 0.11Socializing at work 1.12 3.78 0.10Watching TV 2.19 3.65 0.10Phone at home 0.93 3.52 0.13Napping 0.89 3.35 0.13Cooking 1.15 3.27 0.14Shopping 0.41 3.23 0.16Computer (non-work) 0.51 3.22 0.17Housework 1.12 2.99 0.16Childcare 1.10 2.99 0.20Evening commute 0.61 2.77 0.21Working 6.80 2.68 0.21Morning commute 0.47 2.09 0.29
Measuring Happinesswith Brain Scans
But what about money?
0
10
20
30
40
50
60
70
80
90
1965 1970 1975 1980 1985 1990 1995 2000 2005
Develop a meaningful philosophy of life
Be very well off financially
% “Very important or essential”
What do people say makes them happy?
Percentage of Americans who say they are “very happy” (Gallup, 2003)
0%
10%
20%
30%
40%
50%
60%
70%
<$30,000 $30k-$50k $50k-$75k >$75,000
Australian Living Standards Survey, 1991-1992(percent reporting high life satisfaction)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1 2 3 4 5 6 7 8 9 10
Household Income Deciles
$0
$4,000
$8,000
$12,000
$16,000
$20,000
$24,000
1957 1966 1975 1984 1993 20020%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Personal income(in 1995 $)
Very happy (%)
Life satisfaction around the world
Easterlin Paradox: Happiness is related to relative income, not absolute income. Not much change in well-being as nations become wealthier
Easterlin found that within a given country people with higher incomes are more likely to report being happy. However, in international comparisons the average reported level of happiness does not vary much with national income per person, at least for countries with income sufficient to meet basic needs.
Not everyone agrees with Easterlin.
Stevenson and Wolfers believe there is a robust relationship between well-being and income (or more precisely the log of income).
Concave psychophysical functions
1. Bernoulli’s hypothesis that utility is the log of wealth2. Fechner’s Law that sensation is a logarithmic function of physical value
Kahneman and Deaton find a linear relationship between life
satisfaction and the log of income.
Emotional Well Being, Stress, and Life evaluation (SWB)Positive affect Blue affect
Stress SWBHigh income 0.03 −0.06 −0.03
0.64Insured 0.40 0.92 1.19
0.59Old 0.79 0.93 6.28
0.50Graduate 0.03 0.01 −1.93
0.48Religious 1.16 −0.02 1.21
0.35Female 0.16 −0.60 −1.89
0.29Married 0.66 0.45 0.66
0.32Weekend 1.13 0.72 4.83
0.01Children 0.08 −0.37 −2.47
−0.11Caregiver −0.49 −1.02
−2.99 −0.25Obese −0.38 −0.14 −0.42
−0.31Divorced −0.38 −0.27 −0.88
−0.32Health −1.36 −1.22 −3.15
−0.48Headache −4.45 −3.41 −9.82
−0.78Alone −7.13 −2.10 −3.73
−0.75Smoker −1.01 −0.84 −2.85
−0.70
10k 20k 40k 80k 160k0.4
0.5
0.6
0.7
0.8
0.9
1
SWBPos AffectNot BlueStree Free
Focusing Illusion –people overestimate the extent to which the target event matters
Duration neglect and the failure to predict adaptation
Projection bias – people making predictions about themselves in another state (i.e., sexually aroused) have difficulty imagining how they will feel in the other state
Affective Forecasting Errors and Happiness
