Experienced Utility

Kahneman and Krueger seek to revive the nineteenth-century version of utility: actual felt happiness rather than revealed preferences. They note that psychological research has shown two ways of measuring this. Unfortunately, those two measurements conflict with one another. One involves what they call “experienced utility” while the other involves what they call “remembered utility.”

I think it is fair to say that they think experienced utility is a more accurate measure than remembered utility. When people report on their remembered utility, they tend to give more weight to peaks (or troughs) and the end of an experience than they do to all the intermediate moments.

We had an extensive discussion of whether remembered utility or experienced utility is the more accurate measure of well-being. Mikayla and Danny both described strenuous physical work: running a marathon or going to swimming practice. As they described it, these activities are quite unpleasant: the experienced utility of swimming to exhaustion or running a marathon is lousy. But at the end, you call it a good workout and you’ll come back to do it again tomorrow. That suggests that maybe remembered utility is the more relevant measure.

Robert drew a distinction between activities where overcoming or mastering pain is part of the activity and those for which it is entirely incidental. Some people want the challenge of pushing themselves to physical performances or overcoming their writer’s block. But the pains of childbirth seem completely incidental to what you want to accomplish, namely, having a child. In the latter case, the experienced utility measure perhaps comes closer to the truth.

We also talked a bit about adaptation. We have encountered this before when talking about the capabilities approach. Here, there are two competing attempts to account for a baffling phenomenon. The baffling phenomenon is that people’s reported happiness does not seem to vary with major life events. Why? One explanation is that we are on an “aspirational” treadmill: our happiness goes up but we don’t see it that way because we want the next thing and so when we answer questions about our happiness, we report dissatisfaction. Another explanation is that we are on a “hedonic” treadmill in which we get happiness spikes from things like consumer goods that do not last and have to be constantly repeated by acquiring ever more stuff. The authors claim that the measurements of experienced utility suggest that the hedonic treadmill account is more accurate.

I also think that this research shows there are some things that no one adapts to: physical pain (marathons aside), mental illness, and involuntary employment, for example. If that is right, then a society devoted to improving the well-being of its members would de-emphasize consumer goods and devote more resources to helping people to avoid or overcome those three things. So there are real policy implications to this research.

I also think there are significant implications for our lives. Who wouldn’t want to know the sorts of things that make people happy and the sorts of things that only seem to do so? You could spend your life perpetually confused about what would really be good for you.

On that note, there is a very accessible book summarizing the research in this area by Dan Gilbert called Stumbling on Happiness. Check it out from the library, or, if you buy a copy, do what I did and give it away to someone else when you’re done. Having a big collection of books doesn’t bring happiness. (While they do make pretty furniture, books are a pain to move and keep clean.)