The equation for happiness

By James Zuccollo 12/08/2014

As the world starts to move from focusing on growth to wellbeing a group of neuroscientists decided to test people’s brains to check whether ‘happiness’ occurred as predicted. The BBC reports that they found

“We can look at past decisions and outcomes and predict exactly how happy you will say you are at any point in time,” said lead author Dr Robb Rutledge from University College London.

The experiment tested decisions under uncertainty, which is a well-researched topic in economics. The best model we have at the moment derives from Kahneman and Tversky’s development of prospect theory. At the core is the idea that our happiness depends on changes from our current situation. For example, glorious sunshine is only exciting if you don’t see it every day.

The twist that the neuroscientists confirmed is that our happiness at an outcome depends not only on where we start but where we expected to get to. If the weather forecast was great then a beautiful day isn’t such a cause of joy as it would be if rain had been forecast.

Studies such as these are crucial for informing our models of choice. Those models can seem esoteric at first but they are at the heart of arguments over alcohol regulation, plain packaging, compulsory pension saving and so on. This is the primary research that will define our future freedoms.

h/t: @chagelund