Bryan Caplan  

The Myth of Californian Happiness

The Decline of Freedom... Focusing Illusion, Climate Cha...
Last week, Jeff Ely remarked:
The underlying problem here is that California is simply a beautiful place to live.  It's not just the climate, or the people, or the geography.  It's that something floating around in the air that just makes you happy all the time you are there.
This inspired me to track down and finally read David Schkade and Daniel Kahneman's classic paper, "Does Living in California Make People Happy?" (Psychological Science 1998).  Key findings:
  • Surveyed students from California and the Midwest had virtually identical overall happiness.
  • Both groups believed that people like them would be happier living in California.
  • Californians were much happier with their weather, but both groups vastly overestimated the effect of weather on overall happiness.
Schkade and Kahneman argue that their paper captures a more general mistake - "focusing illusion":
[I]t is difficult or impossible to simultaneously allocate appropriate weights to considerations that are at the focus of attention and to considerations that are currently in the background.
In this instance:
[R]elative advantages of California (or disadvantages of the Midwest) loom large when a resident of one region considers the possibility of life in the other.  When people answer a question about their own life satisfaction, however, their attention is focused on more central aspects of life.  An observer's failure to anticipate this shift of attention in the person experiencing the event is a focusing illusion.  We predict similar effects for any determinant of life satisfaction, which depends on so many factors that focusing attention on any one of them will inevitably cause an exaggeration of its impact.
Schkade and Kahneman don't mention that standard econ has a much simpler explanation for their findings: Compensating differentials.  The more pleasant the location, the higher the cost of living; in equilibrium, real estate prices have to make the marginal resident indifferent between California and Ohio.  Of course, econ's simpler answer might be wrong, but I wish they'd addressed it.

HT: Tyler

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COMMENTS (7 to date)
Steve Sailer writes:

Last time I checked income by state versus the ACCRA cost-of-living calculations, which are used by corporations to figure the change in salary appropriate for employees being transferred around the country (and thus include cost of owned housing and not just rent), Minnesota (awful weather) had the highest standard of living in the country. The bottom for standard of living were California (fine weather), Hawaii (great weather), and Washington DC (power).

ajb writes:

Huh? I thought that this was exactly Ely's point. Any advantage of California is quickly negated by free entry.

Adam writes:

Excellent point about the compensating differentials. CA's climate and geography are great. But to get it, one also suffers high crime, lofty housing prices even after the crash, lost time in traffic (try going SF or even Alameda from Berkeley at 4 pm), etc.

Snorri Godhi writes:

For some reason I cannot access the Schkade & Kahneman paper. I'll try googling later.

I am familiar with the concept of compensating differentials from The Armchair Economist. However, it does not explain the more recent finding by Oswald and Wu (SciencExpress 2009) that people are actually less happy in California than in most other States. How is it possible for different States to have different levels of happiness, when there are no barriers to migration? several explanations come to mind:
* the indifference principle holds at equilibrium, and right now there is no equilibrium, because there is net emigration from California (counting only US citizens);
* the indifference principle does not hold: people over-rate good weather and beaches;
* unhappy people are less unhappy in New York and California, happy people are most happy in Louisiana and Hawaii, so even if everybody emigrates rationally, people in New York and California are still the least happy.

Is there anything wrong with my reasoning? is there any other possible factor?

Pat Cahalan writes:

> When people answer a question about their
> own life satisfaction, however, their
> attention is focused on more central
> aspects of life.

The greater social science question, of course, is how good of a measurement instrument is the survey when it comes to measuring things like happiness.

The focusing illusion is absolutely a problem with this sort of study, but the focusing illusion can exist and yet still not represent an actual error. It might also be the case that the instrument in question cannot entirely capture what you're attempting to measure. So you get what looks like counterintuitive results, and blame it on focusing illusion, when in fact your instrument is limited or outright broken (disclaimer: I haven't read the referenced paper yet, so it's unfair to state categorically that this is the case in this particular instance).

I'm not terribly big on the use of a single instrument to measure something as complex as happiness; it presupposes that each individual is capable of measuring their own level of happiness for one thing, and that's just plain crazy-talk. I have a bipolar alcoholic relative who would fill out a happiness survey and come across as completely content, but it is absolutely plain to anyone that the subject isn't capable of being truthful with themselves about their own happiness.

Lots of people think their marriage is completely happy, until they find out their partner is miserable when the divorce papers get served, for a far less extreme example.

It might be suitable to measure *contentment* using a fairly simple instrument, since contentment itself isn't an extreme state. But "happiness" (or "unhappiness") represents generally an exception to the norm of human conditions.

If you want to measure something like happiness, you need a collection of instruments to get anything resembling a reasonable metric, IMO.

California is kind of two states. Northern Californians -- not generally happier. Southern Californias -- generally happier.

Check out twittermood

You'll have to zoom out, scroll over, and zoom in to see how Nor Cal is more purple and So Cal more orange.

Robin Hanson writes:

This might also be a near-far effect; the factors that seem to us important in far mode might just not make much difference our near perceptions when we are actually there.

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