Quality of Life: Scorecard (Photo credit: AlphachimpStudio)

Rational humans are supposed to maximise their utility while exercising choice between different options. The exercised choice, or the revealed preference, is sometime taken as a proxy for measuring the utility of the chosen option over the other options. To elucidate by way of an example, if I had an option of buying a 2BHK apartment close to my office and an option of buying a 3BHK apartment far from it, at equal monetary cost, then the fact that I chose the apartment close to my office may be taken as a proxy to reveal that I prefer shorter commutes to more home space.  My choice reveals that my utility for a shorter commute is greater than my utility for one more bedroom.

The utility, of an option, itself can be conceived of as the increase/decrease in happiness or subjective well-being if one chose that option. Thus, a rational human being chooses that course of action that he thinks increases his happiness/ subjective well-being (SWB).

If happiness/SWB drives utility and utility drives choice, then choices should be driven by perceived happiness. However, a recent study by Benajmin et al showed that though for the most times exercised choice and perceived happiness correlate, at times there are systematic reversals, where other aspects such as predicted sense of purpose, control over one’s life, family happiness, and social status triumph over or take control of the decision making process and make the choice deviate systematically from what it would have been if driven solely by happiness/SWB.

To elucidate by way of an example, a person may think that a promotion will lead to a decrease in his happiness/SWB, but may still work towards that goal as he also believes that it will give rise to increased status and perhaps more autonomy and meaningfulness. Thus, his choice will be driven by factors like status and autonomy rather than purely happiness/ SWB.

Does this research shake the fundamental economic assumption that maximising utility = maximising happiness/SWB and can lead to a revision of the textbooks? I would answer that with a yes and a no.

No, because rather than redefining Utility, perhaps what is needed is to redefine Well-being. Well-being has narrowly been conceived of as either happiness or daily felt positive emotion, and/or as an evaluative overall satisfaction with life. This sorely needs revision.

Martin Seligman, the father of the positive psychology movement, is at the forefront of such a redefinition. He stresses the need to delineate the multi-factorial nature of well-being. One such multi-factorial description is the PERMA model where well being is made up of Positive daily emotions (or happiness); Engagement or a sense of flow/mastery; positive Relationships; Meaning and purpose in life and finally Achievement or status and respect commanded.

Here, it is instructive to pause a bit and recollect that positive emotions/ well-being is a different and separate construct from (lack of) negative emotions/ill-being. A lack of negative emotions does not guarantee positive emotions and vice versa. Negative emotions/ill-being results mostly from not being able to meet the necessities or the ‘deficit needs’ of life; while positive emotions/well-being results from progress on the open-ended ‘growth needs’ of life. To put in terms of the well known motivational theory by Maslow- Safety, Physiological, belongingness and self-esteem are deficit needs that need fulfilling before one can move on to address the growth needs such as cognitive, aesthetic, self-actualisation and self-transcendence.    

It is my contention that all choice is driven by these basic motivational needs, and before choice or utility can be driven by maximizing happiness/ well –being; one has to ensure that deficit needs are not being compromised or given a short-shrift. In the case that a deficit need is being compromised or playing a significant role, it would hijack the decision making process and deviate it systematically from maximising well-being.

To again elucidate by way of an example, suppose I have a career choice between freelancing for psychology & business magazines, which will lead to immense positive affect, engagement, satisfaction and meaning for me in the long run; but which is also highly insecure, does not provide me with much control over my life (my life being virtually run by editors and publishers), may lead to solitary and socially isolated/ostracised ‘writer’ label, and my not be seen as high status ; and this contrasted with my regular day job that provides security, autonomy, social inclusion and status/ respect;  then the choice would be as clear as a day – none except an exceptional soul will take such risks or be driven solely by maximizing his well-being in long-term, to the exclusion of serious possibilities of ill-being in the near-term.

Thus, a realistic model of decision-making/ choice will incorporate a weighted sum of ill-being factors and well-being factors, with ill-being factors playing a more dominant role when it comes to identifying the minimally necessary conditions; and well-being factors playing a more dominant role if the ill-being factors are under control and not relevant anymore.

So what are these ill-being and well-being factors; they are-

  1. Security (lack of fear) (ill-being) vs. Pleasure in day-to-day work/life (happiness) (well-being).
  2. Autonomy (control over life) (ill-being) vs. Mastery (engagement) (well-being)
  3. Relatedness (family/ social ties) (ill-being) vs. Purpose (meaningfulness) (well-being)
  4. Achievement (status/respect) (ill-being) vs. Satisfaction (with life- SWB) (well-being)

The earlier simplistic model that equated choice with maximizing happiness definitely needs revision but not a radical/paradigmatic re-definition – choice is still driven by maximizing well-being, now also ensuring that ill-being factors are not in play, provided ill-being and well-being are broadly conceived and their multi-factorial nature acknowledged and included in the analysis.

In the end, borrowing insights from psychology and economics, such integrative work also helps us know how nature is carved at its joints and which factors are really important and should be considered while we deliberate on a choice or make a decision. Maybe knowing about these factors will lead us to make better and more informed choices or at least ease the agony we feel when we reflect back on the road not taken- perhaps it was the more rational thing to do- and now we also understand why!

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