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Are we better off living in California?


Final-Winter-Forecast

It’s a question my wife & I have been debating since we moved to Chicago in January.

Of course, the weather is the primary trigger. Talking to our friends doesn’t help either. Folks living in bay area continue to boast about the near 70 F temperatures. Each call typically starts with a mention of the cold temperatures in Chicago. And at the end of each call, we dream of living in a warmer place.

But when we start talking about happiness, there is an interesting pattern to most conversations. Whether it is the high cost of living or the lack of public transport, it seems the favorable weather conditions in California are balanced out by other factors. So in terms of overall life satisfaction, we are not very far off from our friends. In fact, we are probably as satisfied.

This raises the question: will we be more satisfied if we move?

Turns out, the question has been researched already. In this paper, Kahneman and Schkade refer to a research they conducted with students in Midwestern and Southern California universities. Students were asked to give a satisfaction rating to life overall as well as to certain aspects of life. Each student provided a satisfaction score for themselves or someone similar to themselves in both the regions. The data was analyzed for both self and other conditions.

Both groups of students rated that the Californians are likely to be more satisfied than Midwesterners. Satisfaction with climate tend to account for this high score. However, their own overall life satisfaction score was almost the same. And it gets even more interesting. Climate-related aspects were rated as more important for someone living in another region than for someone in one’s own region. In essence, a midwesterner believed that climate has a small part to play for her own life satisfaction but a larger part for someone living in California. Similarly, a Californian believed that the relatively warmer climate has a smaller significance for her life satisfaction but much higher significance (likely negative) for someone living in the midwest area.

How do we explain this discrepancy? The scientists believe that this is largely due to the effect of Focusing Illusion. When a judgement of a category (life satisfaction in Midwest vs California) is made by focusing on a subset of that category (life satisfaction due to climate conditions), we tend to overweigh the subset’s relative value to any other subset. In other words, we tend to ignore other aspects of life satisfaction such as job, travel, housing etc and end up deciding based on one single parameter. This is exactly what the students did and this is probably what my wife and I are doing.

In our case, we are conveniently ignoring the geographic location of Chicago that makes it far easier to travel within United States as compared to California. Something that can be very important for our consulting jobs.

Clearly, we should do a better job in evaluating this decision. Will this awareness of Focusing illusion help us do that? I don’t think so. I will probably rationalize my preference for California to the fact that I grew up in a tropical climate and still pursue the ambition to move. After all, this susceptibility to our evolutionary biases is what makes us human. 

#kahneman #behaviour #biases #behaviouraleconomics #focusingillusion #humanbrain

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