How spending money can create happiness – Part 2

This is a continuation from a previous post titled: How spending money can create happiness – Part 1

5. Pay now and consume later

Modern culture is consume now, pay later.  We can get almost whatever we want, on credit, delivered to out door within 1-2 days (sooner if amazon drones take off).  This eliminates anticipation, which is a source of happiness.  Taking the cookie example, eat the cookie now and get X pleasure, or save the cookie for later and get X pleasure plus all the anticipatory pleasure from delaying.

A counterargument is to just eat the cookie and then reminisce about the experience to gain pleasure.  However, while reminiscence provides happiness, it seems that stronger feelings are aroused from anticipation.  More happiness was reported looking forward to a vacation than back on it, more expensive thank you gifts were bought before a task was done than after the same task and jurors award more money to an accident victim who will suffer rather than one who has already suffered from the same accident.

One reason for human lack of recognition of anticipation is another affective forecasting error termed future anhedonia whereby humans assume that future feelings will be less intense than present feelings, which turns out to be false.  It’s likely a result of our consume now evolutionary tendency due to scarce resources.

6.  Think about what you’re not thinking about

There is a peculiar property of imagination that pertains to future events.  Namely, the father away an experience lies in time, the more abstractly we tend to think about it.  Lets imagine that I think about how happy owning a beach house will make me.  I think about sunrise beach runs, building sandcastles with my family, grilling on the sunset deck with a margarita, etc.

However, the authors urge us to think about the details rather than the big picture in abstract terms.  Will I like driving 3-4 hours on Friday evening to get to the house, what about a hurricane approaching, the rotten wood on the deck needs replacement, my daughter is scared of the water after being stung by a jellyfish, the taxes are huge, the house across the street in a rental property for partying college kids, etc.

These details are what matters to happiness.  Literature suggests that daily happiness is shaped more by the hassles and uplifts of daily life than major life events (Kahneman 2004).  However, due to errors in affective forecasting these details are obscured from view when we focus on future events.  We should bring them into focus.

7. Beware of comparison shopping

By altering the psychological context in which decisions are made, comparison shopping may distract consumers from attributes of a product that will be important for their happiness, focusing their attention instead on attributes that distinguish the available options.

This one makes sense to me.  Others have commented on this topic especially as it relates to the paradox of choice wherein more choice tends to make us less happy.

8. Follow the herd instead of your head

Research suggests that the best way to predict enjoyment of an experience is to see how much someone else enjoyed it.   This seems to be at the heart of user reviews on websites such as amazon.

A cited experiment shows that others opinions about what make us happy might carry more weight than our own opinion.  This goes against a lot of what I believe as an individualist, but these things are complex.  Participants were asked to eat 2 hidden snacks.  When the snacks were revealed as celery and a cookie the participants rated how much they would enjoy each snack, then they ate them.   Hidden observers who could not  see the snacks judge the participants flash of affect to the unveiling to make a prediction on which they would like more.  The observers predictions rivals the participants predictions suggesting that other people may provide a useful source of information regarding the things on which  money.

Conclusions

Humans need to try and predict the future.  There is no way around it because happiness by nature is a future phenomenon.   While it’s nice to reflect on the good ol days, those reflections wont insure our future happiness.  However, humans are terrible at figuring out what will make us happy despite a huge flood of information on the subject in the past decade. We have no choice but to educate ourselves on the ways in which our affective forecasting abilities are flawed.   No one will do it for us.  Indeed, much of the consumerism culture we find ourselves in is fueled by our lack of understanding of these basic fallacies of human thinking, so these errors are encouraged.  I’ve read the article the post is based on numerous times and I still have to refer to the article on occasion to remind me.  It’s just not natural to think this way, well, until it is…….Caveat emptor!

2 Replies to “How spending money can create happiness – Part 2”

  1. Tim Ferriss talks about #5 on occasion on his podcast. He schedules 2 vacations very early in the year, and claims that the anticipation is by far the best part. I don’t deny that the planning and anticipation can be pleasurable, but you have to love the actual end product to anticipate doing it!

    Wow, #6 is kind of a Debbie Downer or Eeyore attitude. But if the data supports that it makes you happier, I’m willing to give it a try!

    Great post!
    Dr. C

    1. Dr C
      I think #6 might be the most valuable. Think about the mundane parts of the experience to get an idea of the true experience. We all know this to be true but we forget the details at our own happiness cost later. It’s not meant to dwell on the details, but to acknowledge them early in the decision process, use the info to make the decision then move on to the anticipation and actual experience.
      Thanks for commenting

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