Why We're Terrible at Predicting Happiness

By Fool.com

My wife and I used to live in Southern California. Now we live on the East Coast. Hardly a day goes by that we don't miss California's weather. Los Angeles is 70 in the winter and 80 in the summer. The East Coast basically has two temperatures: Repulsively hot and inhumanely cold.

Here's what's hard to come to terms with: We miss California's weather because we think it would make us happier. But there's no evidence, either for us or anyone else, that Californians are happier than then their East Coast counterparts. The happiest states in America are the Dakotas, Nebraska, and Minnesota home to some of the most insulting climates in this hemisphere.

Continue Reading Below

Daniel Kahneman wrote about this paradox in his book Thinking Fast and Slow. He and a colleague surveyed students from California, Ohio, and Michigan. Here's what they found:

The short explanation is that when we think better weather will make us happier, we're leaving out the thousands of other variables that influence happiness. It's just hard to grasp that when you're in the moment dreaming about nice weather.

Kahneman summed it up with a powerful sentence: "Nothing is quite as important as you think it is while you're thinking about it, so the mere act of thinking about something makes it more important than it's going to be."

Here's a great example. This morning's New York Times had a story aboutCalifornia's most cherished I-wish-I-lived-there city, San Francisco:

When someone from the East Coast thinks about how wonderful California weather is, they're probably discounting the dozens of other factors that quickly offset the benefits of sunny skies. Like long commutes. Absurd traffic. Expensive rent. A boring job. Life goals still unaccomplished. All of these things can be more influential on happiness than pleasant weather. And they're all as ubiquitous in California as they are in Maryland. The things that do generate happiness family, friends, autonomy at work, working for something bigger than yourself aren't biased by climate or geography.

Money is similar to weather -- something we dream about but overestimate when predicting happiness. Here's Kahneman again:

All of us invest because we have goals, and most of those are designed to make us happier. By and large, they will. But I'm often amazed at how much effort we put into chasing things that probably won't do us any good while discounting and ignoring the stuff that probably will.

For more:

Read More Books And Fewer Articles; Read More History and Fewer Forecasts

Where Progress Comes From

The Anti-Reading List

Hard Truths For Investors to Wrap Their Heads Around

Is Today's Market More Volatile Than in the Past?

The article Why We're Terrible at Predicting Happiness originally appeared on Fool.com.

Contact Morgan Housel at mhousel@fool.com. The Motley Fool has a disclosure policy.

Copyright 1995 - 2016 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.