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Paradoxical lifestyles

Just came across an interesting behavioural economics paper by Stutzer & Frey. Behavioural science is an extremely ‘hot’ field of academia at the moment, hitting the mainstream with books such as Freakonomics (Dubner & Levitt), Predictably Irrational (Ariely), Blink (Gladwell), Nudge (Thaler), etc), and with increasing influence in politics, notably within the Conservative Party here in the UK.

The key finding is this:

Our main result indicates [...] that people with long journeys to and from work are systematically worse off and report significantly lower subjective well-being

So you make yourself systematically worse off, and much unhappier, by buying a large suburban house (with long commute) with an extra bedroom for the rare occasions when your parents come to visit, instead of a short-haul townhouse – even though at the time of purchase, going for the larger suburban house seemed like a totally rational decision.

Same deal with getting a highly paid city job in Canary Wharf or on Wall Street or Madison Avenue even though it dramatically extends commute time – when we would lead a happier job working a ‘worse’ job locally.

The conclusion is not totally unexpected, but it’s an interesting example that makes you think about how irrational human existence can be – pretty depressing really. It highlights the importance of behavioural economics: we may be able to achieve a much happier society if it can succeed in revealing these paradoxical lifestyle choices and thus helping us to avoid them.

We don’t understand, long term, the relative contributions to our happiness and well-being of different factors in our lifestyle. Behavioural science in the 21st century could have a similar ‘enlightenment’ effect to nutritional/dietary science in the 20th.

I’d be interested to know what other examples there are, from your life, where you now think/suspect a decision you took at some point in life *thinking* it was totally rational has led to you being worse off overall?

(hat tip)

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This entry was posted on Friday, July 18th, 2008 at 3:43 pm and is filed under Musings, New science. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Adamski

I completely agree that behavioural economics is a really interesting field - moving beyond rational choice and beyond indicators like GDP per capita, when what is actually relevant is happiness/utility/satisfaction has to be the long term way forward....

...but I also think it's way too easy to get carried away with this kind of thing. For example, might not commuting time be correlated with age (young people more likely to live in towns rather than the commuter belt) or wealth (houses in prime locations), or some other underlying driver of happiness?

I'm probably doing the authors a disservice here, as they almost certainly made allowances for other variables, but my point is that as academically interesting as papers like this are for pointing out macro trends, they are a long way from being able to inform the micro decisions I make in my own life.
Philippe Bradley

if you really care about the methodology, which upon a quick scan seems sound, here's the direct download link: http://www.iew.unizh.ch/wp/iewwp151.pdf

Ultimately the utility of these findings, and of the field itself, is in providing us with an awareness of inherent decision making biases, such that we can rationally address/redress the biases and make better decisions. Scientifically elucidated, codified and distilled wisdom. The above finding is an example of empirically-derived wisdom - but I agree with you about the dangers of correlation and causation - its like any science in that only when you go deeper (more micro) can you get really useful knowledge, and thus technology, out of it. Just like Mendel's "discovery" of inheritance in biology, it took more precise "wisdom" - e.g. DNA (i.e. molecular genetics) before it became a truly useful tool in the lab.

There's clear and present danger of abuse as it gets more advanced (more 'micro') - it could dramatically enhance propaganda, giving it precise and powerful rules/techniques for how to frame issues/prime audiences to be more receptive/accepting of a statement/policy. As behavioural science attains the advanced level (and thus increased utility) of other sciences such as physics, chemistry or medicine, with their highly informative precision tools giving their users ever clearer pictures of cause & effect in the systems they observe, we get uncomfortably close to informing - and thus empowering - brainwashing.

Behavioural science will lead to behavioural technology (in the true sense of the word - I don't mean gadgets, I mean largely immaterial 'tools' - like framing [ http://en.wikipedia.org/wiki/Framing_(economics) ]), with potential for good and bad use, like any other technology. It'll be interesting to spot the development of that technology; most other technology you can put in your hands, or at least put under a microscope, and examine. We may not yet realise just how important humanities will be in the 21st century. And this is coming from a biochemist!