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1 What We Know about Happiness Miles Kimball. 2 What I Know about Happiness “Utility and Happiness,” by Miles Kimball and Robert Willis (Not your usual

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  • What We Know about Happiness

    Miles Kimball

  • What I Know about HappinessUtility and Happiness, by Miles Kimball and Robert Willis (Not your usual paper about happiness. We may be wrong, but we are definitely different.)Unhappiness After Hurricane Katrina by Miles Kimball, Helen Levy, Fumio Ohtake and Yoshiro TsutsuiConversations with Norbert Schwarz

  • Why Happiness Matters for Economics1. Preference for Happiness: Many people value happiness, as evidenced by the fact that they will sacrifice other things for the sake of happiness. 2. News and Happiness: Short-run spikes and dips in happiness signal what people consider good and bad news, which in turn signals what they care about.

  • Two Definitions of HappinessThe Greatest Good for an IndividualFeeling Happy

  • Who Judges the Greatest Good for an Individual?

    An Authority Figure or the Speaker True Happiness used as a cudgel

    Economics Defers to the Individual Utility

  • Utilitarianism (Jeremy Bentham, John Stuart Mill)The greatest good of the greatest numberSolving social problems is important because it is a miserable experience to be poor, sick or downtrodden. It is also important to make things better, wherever we can, even if they are already good.Utilitarianism is part of the philosophical foundation of economics.

  • Measuring Utility: The Modern Tradition of EconomicsLook at an individuals choices (preferences). What an individual chooses indicates what she wants, cares about and values.This works well when the individual is Well informedThoughtfulNot at war with self

  • Measuring Happiness, in the Narrow Sense of Feeling HappyOn a scale from one to seven, where one is extremely unhappy and seven is extremely happy, how do you feel right now?

  • Greater Happiness in the Narrow Sense is Not Always a Good ThingMania: too much happinessToo much sacrificed for the sake of feeling happierExample: changing ones political beliefs in order to be happier.

  • Distinguishing utility and happiness as a matter of logic.

    Utility = The extent to which people get what they want, where what they want is indicated by their choices. Happiness = How positive peoples feelings are at a given time.

  • Evidence that UtilityHappinessPeople who knowingly, thoughtfully and without regret choose not to maximize long-run happiness indicate that utilityhappiness for them. People make choices eagerly that they never regret, but which have no long-run effect on how happy they feel. Moving to a new cityBuying a nice car3. People thoughtfully make choices that they never regret, which lower their long-run felt happiness.Commuting further to a higher-paying job.Longer working hours to put ones child through college. Having a baby?Doing ones duty.

  • The Nature of Happiness (What Makes Us Feel Happy)

  • Key Facts about What Makes Us Feel Happy

    #1: Easterlin Paradox

    #2: Hedonic Adaptation

  • The Easterlin Paradox

  • The Evidence of Choices: Migration Flows Indicate that Income is Valuable to PeoplePer capita GDP in Mexico is not far from what it was in the U.S. in the 1950s. Large numbers of Mexicans choose to migrate to the U.S. Among the many costs of migration, their social rank often drops drastically when they migrate to the U.S. Despite this, they come.

  • Fact #1 In the long run, people can become better off without feeling happier.

  • Hedonic Adaptation: This, too, shall pass.1. After time has passed, things that surely had a big effect on happiness right after the event have surprisingly little effect on happiness. (Not just money.)incarceration loss of the use of limbsserious burns death of a spouse winning the lottery2. The dynamics of national happiness after news

  • Fact #2 about HappinessHappiness depends more on changes than on the absolute level of ones circumstances.Analogy: We have no altimeter in our brains, but we can tell whether we are going up or down.

  • The Elation Theory of HappinessExperienced happiness is the sum of two components: elation: short-run happiness that depends on recent news about lifetime utilitybaseline mood: long-run happiness that depends on ones daily actions

  • Elation and Hedonic AdaptationBecause it is based on recent news, elation fades, News doesnt stay news for very long.The initial burst of elation dissipates once the full import of news is emotionally and cognitively processed. This can help explain why, in the long run, becoming better off may not lead to greater happiness.

  • The Evolutionary Psychology of Elation and Dismay Functionally, elation and dismay may motivate cognitive processingmuch like curiosity.Elation: after good news, it pays to think what you did right, so you can do it again think how to take advantage of the new opportunitiesDismay: after bad news, it pays to think what you did wrong, so you can avoid doing it again think how to mitigate the harm of the bad newsCuriosity: after news that is neither clearly good nor bad, it pays to learn more for the sake of option value

  • The Evolutionary Psychology of Hedonic AdaptationAnalogy: Adjustments in the pupil of the eye protect the eye and enhance sensitivity. Protect: Being too happy or too sad has physical costs. Hedonic adaptation protects from these costs. Enhance Sensitivity: Hedonic adaptation may also increase our sensitivity to, and motivation to make, local changes in our objective circumstances. (Frederick and Loewenstein)

  • Speculations on The Evolutionary Psychology of Baseline MoodHigh social rank makes it safe to look more for opportunities than for dangers.Thus, it makes sense to stimulate the same machinery turned on by the receipt of good news.Optimists and pessimists need each other.Quirks in the system? Pinkers cheesecake

  • Raising Baseline Mood: How to Raise Happiness in the Long RunProzac and Talk TherapyTaking Care of OneselfSleepExerciseEating wellEnjoyable ActivitiesSpending time with friendsAn engrossing hobby

  • How to Raise Happiness in the Long Run (cont.) 4. Positive attitudesGratitudeForgivenessAcceptance of ones situationRaising ones social rank

  • The Problem with Happiness from Social RankThe usual strategies for raising social rank are a zero sum gameanything that works for one person makes everyone else worse off by lowering their social rank However, we can Choose the right pondHelp the unfortunateTreat one another with dignity

  • Why are Utility and Happiness Confused?Because they are dramatic, elation and dismay may dominate peoples perception of happiness. Everyone wants good news. That is, everyone wants what spikes in happiness signal. Not everyone values the emotional spikes per se, as distinct from what they signal. Not everyone will sacrifice other goods for the long-run happiness that remains even when there is no good or bad news.

  • A Non-Judgmental View of the Effect of Materialism on HappinessMaterialism lowers happiness (weak, but interesting evidence).Tradeoff between happiness and other goods. Materialism means higher preferences for other goods compared to happiness.

  • Why Doesnt Rising Income Lead to Greater Happiness?1. Lack of Understanding of Happiness?2. More internal conflicts from greater income?obesitydrug use3. Negative externalities from others freedom?breakdown of communitydivorce4. Resources spent on increased lifespan?5. Raising ones happiness takes time.

  • Why Happiness Matters for EconomicsPreference for Happiness: People value happiness, as evidenced by the fact that they will sacrifice other things for the sake of happiness. News and Happiness: Short-run spikes and dips in happiness signal what people consider good and bad news, which in turn signals what they care about.

  • Unhappiness After Hurricane KatrinaMiles KimballHelen LevyFumio OhtakeYoshiro Tsutsui

  • The Happiness Measure on the Michigan Surveys of ConsumersNow think about the past week and the feelings you have experienced. Please tell me if each of the following was true for you much of the time this past week:

    Much of the time during the past week, you felt you were happy. (Would you say yes or no)?(Much of the time during the past week,) you felt sad. (Would you say yes or no?)(Much of the time during the past week,) you enjoyed life. (Would you say yes or no?) (Much of the time during the past week,) you felt depressed. (Would you say yes or no?)

  • Implications of the October Dip in HappinessIt is difficult to explain this dip in happiness on the grounds that lifetime utility is seriously effected in terms of self-interest. If this dip in happiness is due to altruism, the happiness data told us something we might not otherwise have known: Americans cared quite a bit about those hurt by the earthquake in Pakistanmore than one would suspect from the donation data. Katrina and Rita: >$2.65 BillionSouth Asian Tsunami: >$1.55 Billion

  • Possible Explanations Response of Happiness to News about Lifetime UtilityAltruismSelf-InterestDirect Effect of Graphic Images of SufferingDefinition: Even if an individual watched video clips of a long-ago disaster, their happiness would still go down.

  • What does it mean to say that lifetime utility has fallen permanently?

    Revealed Preference is the measure of lifetime utility. If there were a lever to magically undo the damage of Katrina, we would pull it.True for the harm to others.True for the harm to self, narrowly construed.True even if the past cannot be changed but only the harm from now on reversed.

  • Serious Harm to Self-Interest?

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