Many economists assume that individuals’ decisions are influenced by a reasoned attempt to maximize their happiness, according to Prof. Ori Heffetz, economics. A new Cornell study shows, however, that people are willing to compromise their happiness for monetary gain, for their families and other factors.
The study, titled “Do People Seek to Maximize Happiness? Evidence from New Surveys,” is co-authored by graduate student Alex Rees-Jones ’08, Prof. Dan Benjamin, economics, Prof. Ori Heffetz, economics and Prof. Miles Kimball, economics, University of Michigan. The study was accepted in 2011 for publication by the American Economic Review.
The researchers found that when asked in a survey to choose between two hypothetical scenarios and then evaluate whether their choice would make them happy, people do not necessarily choose the scenario that increases their happiness, Heffetz said.
Although people usually did choose what made them happy, there was a notable fraction of the subjects who made a choice they believed would compromise their happiness. This finding challenges the assumption made by some economists that people tend to maximize their happiness, according to Rees-Jones.
In the surveys, responders were asked to choose between a job that pays $80,000 a year and allows for seven and a half hours of sleep and one that pays $140,000 but only allows for six hours of sleep. Even though they correlate higher levels of happiness with the job that would allow for more sleep, 23 percent of Cornell respondents chose the better-paying job.
The survey also asked students to choose between going home for Thanksgiving and saving the money that would have been spent on the trip. According to the study, five percent of Cornell subjects chose the latter option even though they said that going home would make them happier.
“We found that across different scenarios, people are saying that they will choose to do something that would not make them happier,” Rees-Jones said. “People treat happiness as a commodity and are willing to make tradeoffs.”
People are affected by factors other than just personal happiness, according to Rees-Jones. The paper reflected this fact, as survey subjects’ answers were dependent on other factors like family happiness, health and their social lives.
“We found out that a fraction of people would choose option A and state that option B would make them happier. What we are showing in the paper is that this notion of happiness is not a perfect predictor of people’s choices,” Heffetz said.
Heffetz added that this finding could change our understanding of government policy, which he said is often structured around the assumption that people aim to maximize their happiness.
“One sees if some policy is making people more or less happy. But what we really need to think about is if a measure of happiness should be the main criteria to use for policy analysis,” Rees-Jones said.
Heffetz said the study showed the many factors that influence human behavior.
“People are complex animals trying to achieve certain goals in their attempt to try to increase their welfare,” he said. “However, no single measure or definition of happiness can be used as people have different goals.”
The study involved three survey populations: responders to a Cornell National Social Survey, Cornell students and patients in a doctor’s waiting room in Denver. The study included more than 2,600 respondents, covering most sections of society, Rees-Jones said. It was funded by the National Institute on Aging.