Do People Choose What Makes Them Happy?

Daniel J. Benjamin, Ori Heffetz, Miles S. Kimball, and Alex Rees-Jones, “What Do You Think Would Make You Happier? What Do You Think You Would Choose?” American Economic Review 102(5): 2083–2110, 2012 (ungated version here).

• The motivation for this study by Benjamin et al. (2012) is that subjective wellbeing (SWB) is often used as a proxy for unmeasureable “utility.” In the standard economics model, people choose in ways to maximize their utility; do they choose in ways to maximize subjective wellbeing? 

• Benjamin et al. use surveys with binary choices such as whether you would choose a job with more pay and less sleep or an alternative job with less pay and more sleep. People also are asked to indicate which option would make them happier. 

• The results of the surveys are that subjective wellbeing and choice are strongly positively correlated; indeed, of all the factors measured, (predicted) subjective wellbeing has the strongest connection to (predicted) choice. The measure of subjective wellbeing that is most strongly connected with choice is one that tries to capture lifetime satisfaction, as opposed to measures that aim more at shorter-term positive affect. 

• When subjective wellbeing and choice deviate, they do so in a systematic way. People will make choices that do not maximize subjective wellbeing in circumstances in which the chosen option contributes more to a sense of purpose, for instance, or family happiness, or control, or social status. 

• To investigate whether self-control shortcomings explain the divergence between choice and happiness – that is, I know I would be happier with choice A but I cannot resist temptation so I make choice B – the authors asked respondents about their meta-preferences, about which choice they wished they would make. Most of the deviations of choice from SWB maximization cannot be explained by self-control problems.