The Psychology of Happiness – Part 2

November 18, 2006

A few months ago I blogged about the Psychology of Happiness ( which showed that empirical evidence suggested that most people have a mean level of happiness they rarely deviate from and that beyond a minimal level changes in financial circumstances had very little impact on happiness due to “hedonic adaptation.” The article went on to suggest several ways of systematically improving happiness.

Recent research of two Princeton professors, Alan Krueger (who was my labor economics professor at Princeton) and Daniel Kahneman further support this theory. Their paper, published in the June 30 issue of Science, shows that while people with above-average income say they are generally satisfied with their lives, the correlation is weakened when happiness is measured from moment to moment. The ways in which people with high incomes spend their time tend to make them more tense and stressed than their less-affluent counterparts.

Their study suggests that how one uses one’s time plays an important role in personal well-being. One of their studies asked 900 women to record a diary of how they used their time in a given day and how they felt during each activity. The activities when listed in order of happiness were intuitively rational: socializing, relaxing praying and eating were at the top of the list, while commuting, working and doing housework were at the bottom.

Small non-sequitur for the skeptics among you: historically economists were wary of subjective well being data because only the person reporting his or her response can verify accuracy. Moreover cultural factors may be at play – in the U.S. most people will answer yes to general questions like “are you happy?” However, asking specific time based question “does this activity make you happy” seemingly leads to accurate reporting as showed by positive correlation between the reports of happiness and physiological factors such as brain activity or the level of cortisol, a stress hormone. (Happy people tend to have more of the former and less of the latter).

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