Monday, February 23, 2015

Is there reliable evidence that people can learn to be happier?

There is plenty of evidence that people who use cognitive reappraisal strategies -  for example, changing the way they think about situations in order to reduce negative emotion – tend to have higher life satisfaction than those who try to suppress negative emotion. There is also a growing body of research findings that such skills can be learned and that some reappraisal strategies are more effective than others.

A recent study by Bryan Denny and Kevin Ochsner compared the effects of training using two common variants of reappraisal: distancing and reinterpretation. Distancing involves reappraisal of an emotional event by viewing it from the perspective of a third person observer or an objective, impartial observer. Reinterpretation involves reappraisal by changing the meaning of actions, context or outcomes e.g. by inventing a more positive story to interpret the event.

The 103 participants in the study were divided into three groups: on receiving training only in distancing; one receiving training only in reinterpretation and a third group that was asked to respond naturally to stimuli, but not trained in any form of reappraisal. The training was provided in four sessions separated by 2-5 days. Participants were presented with images and asked to let themselves respond naturally. Those who had been given reappraisal training were also asked to reappraise images.

Both distancing and reinterpretation led to drops in self-reported negative emotional responses over the four sessions. Participants in the distancing group also experienced drops in negative emotional response when they were asked to respond naturally. The results suggest that people can learn to make distancing a habitual response to emotional stimuli during a relatively short training course.

In another recent study Rachel Ranney, Emma Bruehlman-Senecal and Ozlem Ayduk compared the impact of three brief online cognitive reappraisal interventions: self-distancing (watching a personal negative experience as a fly on the wall); temporal distancing (considering the event from the perspective of their future selves); and positive reframing (identifying positive aspects of the experience). The results showed training in temporal distancing to be effective in raising well-being and positive reframing to be effective in reducing ill-being.

I went looking for evidence that people can learn to be happier to follow-up my preceding post about regret. I concluded that post by resisting the temptation to suggest that people who suffer from regrets that do not serve a useful purpose should learn cognitive retraining. At that stage I was not able to cite reliable evidence that such training was effective. Having found some evidence, however, I am not still not sure how effective it would be in dealing with regrets.

If someone regrets a bad choice made a long time ago, temporal distancing is unlikely to work. Viewing the choice as an impartial observer might not help either if it was a really bad choice. Positive reframing could help the person concerned to see something positive in the experience – for example, it could be seen as a learning experience, inducing positive changes in personality. Such reframing is likely to be difficult, however, if the person concerned believes that personality is fixed for life.

There is evidence that the implicit theories that people have about the extent to which attributes such as personality can change has important implications for their mental health. A recent study by Hans Schroder, Sindes Dawood, Matthew Yalch, Brent Donnellan and Jason Moser has shown that people who believe that their attributes can change report greater use of cognitive reappraisal and fewer mental health symptoms. This raises the question of whether people who currently believe that their attributes are set in stone are capable of learning to adopt a mind-set more conducive to improvement.

Monday, February 16, 2015

If your satisfaction with life is adversely affected by regret, what should you do about it?

The purpose of feelings of regret is presumably to help us to make better choices. That suggests that the best way to deal with regret is to make sure we make better choices in future. But regret can also put people into a frame of mind where they make poor choices and find it difficult to enjoy of life.

Regret does not feature prominently in conventional economic theory, even though everyone knows that sensible people take into account the potential for regret when they make decisions.  I suppose that is because Max U, the rational economic man of economic theory, does not let potential for regret prevent him from seeking to maximize utility. Even when economists allow for the possibility that Max might feel losses from the status quo to a greater extent than gains (as in prospect theory), the potential for disappointment and regret still does not come into consideration in the choices he makes.

It is normal for humans to feel disappointment when outcomes are worse than expected – for example when an investment fails even though we have good reasons to expect it to succeed. We feel regret about the opportunities we have foregone in making such investments. Regret is likely to be particularly intense if you mortgage your home to fund an unsuccessful investment.

It usually makes sense for people to take account of the potential for regret in making choices. It is also possible, however, for regret to lead people to make poor choices – choices they later regret. For example, when share prices slump, people who are unduly influenced by regret about the losses they have experienced may decide precipitously to reallocate funds to less risky investments, and later regret that they have sold at the bottom of the market. Alternatively, they may gamble to recover past losses (for example, by buying more shares) and come to regret that choice if the market falls even further. Some economic studies, for example theoretical and experimental work by Philip Strack and Paul Viefers, illustrates the potential for regret to influence decisions in this way.

There is some evidence that regret can have a large impact on life satisfaction. The results of a recent study by Olivia Pethel and Yiewei Chen seem particularly interesting, since these authors use a measure of the intensity of regret, in addition to indicators of negative decision outcomes and the tendency of people to feel regret. The study focuses on mature adults, people over age 35, who are old enough to have had opportunities to make decisions which they might regret. The findings of the study should probably be viewed with caution because of the small size of the sample (119 adults) sex composition (71% female) and the potential for bias in the informal sample selection process that was used.

The regret intensity variable used in the study was constructed by asking people how much they regretted having made wrong choices in various aspects of their life on a 5 point scale (1 = no regret; 5 = very strongly regret) and averaging across the scores. The results of the regression analysis suggest that “very strongly regretting” a wide range of choices in life would be likely to have a large impact on life satisfaction – reducing it by about 1.6 points on the 7 point scale used in the study.

The authors suggest that people who have lower levels of regret intensity may have developed effective emotional regulation strategies in dealing with life regrets. Unfortunately the study does not directly test the use of regulation strategies.  However, the regression results support previous findings that cognitive reappraisal - use of emotion regulation strategies that change the way situations that elicit negative emotions are viewed - has a positive impact on life satisfaction.

I will resist the temptation to conclude that everyone should be taught the bygones principle - much loved by economists - that decisions should focus only on future costs and benefits, leaving aside regrets about the past. In my experience, the bygones principle is much easier to apply to public policy than to one's private life. 

I will also resist the temptation to conclude that people who are allowing regrets to interfere with their enjoyment of life should learn cognitive reappraisal skills. It would be easy to draw upon my own personal experience to suggest ways people might be able to acquire such skills, but at this stage I can't cite reliable studies testing what works and what doesn't work.

Monday, February 9, 2015

Does it make sense to think of trade-offs between life satisfaction and wealth?

Before you answer the question, I would like you to conduct a couple of thought experiments.

The first step is to answer the following question:
All things considered, how satisfied are you with your life these days? Please give your answer as a number between 1 and 10, with a rating of 1 is you are dissatisfied and 10 if you are satisfied.

That is a standard question that has been asked by happiness researchers. Now we come to the thought experiments.

Thought experiment 1:

Imagine that your circumstances suddenly change so that it becomes possible for you to increase your peronal life satisfaction rating by 25% if you are prepared to sacrifice some wealth. What is the maximum amount of wealth that you would be prepared to sacrifice in order to achieve an improvement of 25% in your life satisfaction rating?

Don’t worry if the 25% improvement would take you beyond the top of the rating scale. For the purpose of this exercise it is deemed to be possible to increase your life satisfaction beyond the end of the scale e.g. from 10 to 12.5. That makes sense because people who are completely satisfied with their lives sometimes find that their lives get even better.

Thought experiment 2:

Now imagine a different scenario. Your circumstances change so that it becomes possible for you to increase you wealth by 25% if you are prepared to sacrifice some personal life satisfaction. How much life satisfaction would you be prepared to sacrifice in order to achieve a 25% increase in wealth?

My guess is that in answering the first question there are not many people who would be prepared to sacrifice all their wealth to obtain a 25% increase in life satisfaction. In relation to the second question I don’t think there would be many people who would be unwilling to sacrifice any life satisfaction (if only for a limited period) in order to obtain a 25% increase in wealth. Those are just my guesses. If large numbers of people tell me that I am wrong, I will have to admit that I have made a mistake.

What is the point of this exercise?  Some economists have been prepared to assume that the sole aim of individuals is to maximize life satisfaction as measured in social surveys. That might seem to be a reasonable assumption until you think of the implications. If your sole aim is to maximize personal life satisfaction it would be irrational not to sacrifice all your wealth in order to obtain greater life satisfaction, if that possibility became available. Similarly, it would be irrational to sacrifice any life satisfaction under any circumstances to obtain greater wealth.

If the choices that people make imply that they do not aim to maximize life satisfaction, that doesn’t mean that they are irrational. It just means that there are some things more important to them than life satisfaction, including some things that money can buy.

What could be more important to people than life satisfaction? Some clues are offered by research, discussed here a couple ofmonths ago, which asks people to choose between hypothetical situations with different ratings of life satisfaction and other well-being indicators. 

The people surveyed indicated a stronger preference for options offering high overall well-being to you and your family than for life satisfaction. Other well-being indicators ranked above life satisfaction included personal health, being a good, moral person and living according to personal values, the quality of family relationships, financial security, your mental health and emotional stability, a sense of security about life and the future, having many options and possibilities in life and freedom to choose among them and a sense that your life is meaningful and has value.

Monday, February 2, 2015

How does economic freedom promote tolerance?

The headline of Tyler Cowen’s recent article in the NYT is: “Economic Freedom Does Not Necessarily Lead to Greater Tolerance”. Tyler has acknowledged on his blog that the headline “doesn’t exactly capture” the message his article that economic freedom does tend to lead to greater tolerance. The headline seems to me to be almost as bizarre as suggesting that sunshine doesn’t necessarily cause plants to grow.

Tyler Cowen’s article provides a good summary of research findings by Niclas Berggren and Therese Nilsson, particularly their paper “Does Economic Freedom Foster Tolerance?” I urge people to read Tyler’s article, so I will just provide the briefest possible summary of his summary.

The main points are:
  • Societies characterized by economic freedom tend to exhibit greater tolerance toward gay people. There is a similar but weaker relationship between economic freedom and racial tolerance.
  • This greater tolerance is strongly associated with certain features of economic freedom i.e. secure property rights and low inflation.
  • Economic freedom has a closer association with tolerance in societies which exhibit high levels of social trust.

Niclas Berggren and Therese Nilsson suggest that economic freedom promotes tolerance through two main mechanisms: market institutions protecting private property offer a framework in which it becomes less risky to engage in transactions with unknown members of other groups; and market processes involving interaction between members of different groups lead to greater understanding and recognition that intolerance comes at a cost (e.g. loss of profit from failure to employ the best person for the job).

The authors suggest that these positive impacts are reinforced by social trust. Social trust can be expected to have a direct positive impact on tolerance – if you trust people you don’t know, you are more likely to be open and generous in your attitudes to people who are different. Social trust can also be expected to enhance the impact of economic freedom on tolerance – for example, because trust reinforces the expectation that the legal system will treat people equally and in accordance with the rule of law.

So, what do the authors say about the influence of economic development on tolerance? Per capita GDP is included as a control variable in their regression analysis, but the results seem to imply that economic development has no impact on tolerance.

At first sight those findings appear to conflict with other empirical analyses, which I have supported, which suggest that the widespread economic opportunity that tends to accompany economic growth also tends to foster emancipative values, including greater tolerance.

I think economic freedom shows up as being more important than per capita income levels because tolerance is more likely to be sustained if economic opportunities are growing - and because economic freedom fosters economic growth. It is reasonable to expect tolerance levels to be lower in high income countries where economic opportunities are contracting (e.g. where there is high unemployment) than in high income countries where economic opportunities are expanding. That was one of the points that Benjamin Friedman made in his book, The Moral Consequences of Economic Growth, which I discussed on this blog a few years ago.

The point I am coming to is that it still seems reasonable to expect that one of the mechanisms by which economic freedom promotes tolerance is by promoting widespread economic opportunities. When opportunities are expanding, people are more likely to perceive the potential for mutually beneficial economic interactions with others and are more likely to be open and generous in their attitudes toward people who are different.