Happiness, From An Economic Perspective


It is at once sad and true, that the older you get, the faster time seems to pass. But this is no big surprise, as the brain captures and ‘prolongs’ fresh memories. So first experiences, like your first boyfriend, or your first college class, are more deeply embedded than say, dragging yourself to you 300th lecture, or your 10th boyfriend. The more of the same experience is repeated, the more it feels insignificant, and thus, unrecorded. And by not recording these experiences, time seems to “fly.” It is no fun to be jaded, and it is this reason I respect Taylor Swift, who seems to experience love and disappointment with surprising poignancy.

There is also a tendency, among us irrational beings, to imprint bad memories more deeply than positive ones. But as with many evolutionarily rooted traits, this one basically sucks, and backfires all the time. It backfires in a relationship, when one person dismisses everything their partner has done right, for one thing they have done wrong. It backfires when you go to one frat party and then swear off beer forever. It backfires upon our general well-being and happiness, because we are conditionally programmed to always remember the bad, and essentially dismiss the good as a transient experience. I find this so tragic, because it means that, as pleasure-seeking we are as human beings, we are also risk-averse. This paradox basically ensures that happiness is never continually optimized because of our fear of failure, of negative experiences, of bad memories.

There is a relative scale onto which we all measure the quality of our lives–this is called the reference-dependence point for behavioral economists. Satisfaction with our wealth, our careers, our cars, are not measured against an objective reality (if such exists), but only against what we know. If we stripped away this reference-dependence point, and measured utility, it would hike upwards exponentially. The graph would literally shift upwards, everything else held equal. But this is not psychologically possible! We are programed to only ever be satisfied with more, never less.

Where does happiness come from? If such a point of utility exists, the only possible way we could ever be satisfied, as humans, is if we are following a continuous, upward sloping curve. This is impossible. Life only gets harder. But then I think of girls my age who are sold into slavery, who are victimized, who are abused and are rarely shown kindness, and my reference point changes. I think of the children in Sudan I once built a movement around, and my reference point changes. It shifts because in that moment, I am so grateful for everything I have I can barely begin to believe that this is my life I’m so lucky. And when I have absolutely nothing more to ask for, other than a mother who is happy and safe, my health, and the people I love and care about, my reference point is nearly zero. You could take away all of my possessions, my car, my standing in a somewhat prestigious university, and I will take just the people I love and my health and I could be so happy.

Happiness is a vague experience. How do you even define happiness? (without getting into the philosophical discussion of the dimensions of emotion.) In one sense, full bliss can never be attained, only approached. In another sense, it could, theoretically, be continually attained. But if we’re following the utility function model for reference-dependence, the most powerful trigger for happiness, I think, would be gratefulness. Gratefulness is not just the awareness of your own luck and fortune, but also the acknowledgement of the sadness and atrocity in some parts of the world. This feeling, I think, is so important when we get caught up in the petty “failures” in our lives. “I was rejected to the summer internship at Deloitte.” “I got a C on a midterm I worked studied really hard on.” Of course, it is okay and maybe even good to care about these things, but to let it affect your overall happiness, or your own self-respect, or how kind you are to yourself, is a little problematic. Happiness, I think, comes with the acknowledgement that there is something so much bigger than yourself. It comes with a feeling of gratefulness of everything you do have, and a letting go of everything that you do not.