The Evolution of Happiness

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					                                   The Evolution of Happiness
                                     Discussion by Gavin Cameron*
                               American Economic Association Conference
                                      New Orleans 7 January 2001

My discussion is going to focus on an evolutionary interpretation of the stimulating papers we have
just heard. I won’t go so far as to argue that evolution explains everything we have heard, but it is
worth thinking about its implications.

As with any issue pertaining to individuals, it’s good to start with evidence based on studies of twins.
In such studies, the psychologists Lykken & Bouchard have found that between 50 and 80 percent
of the variance in subjective well-being (SWB) is heritable.1

As an evolutionary phenomenon, the prospect of happiness is an incentive for us to achieve
reproductive success. Our genes are the principals and we are their agents. In most principal:agent
settings, the threat of punishment or the offer of reward has to be credible. In a genetic setting this
is not strictly necessary, so our genes only need to threaten or offer and not necessarily to deliver.

After all, it is costly for our genes to punish or reward us, so they’d like to skimp on it.

An evolutionary basis for happiness has strong implications, such as that the incentives are stronger
during child-bearing years and weaker thereafter (this explains the well-known U-shaped relationship
between age and happiness). It also suggests different incentives for men and women.

If happiness is explained by inheritance, why aren’t we all happy? After all, we are all descended
from unbroken lines of successful genes.

Happiness is costly.

In many settings it is more helpful to be lean and hungry like Cassius than to be an opium eater like
Thomas de Quincy. Since happiness is costly, it is also a good signal of genetic fitness. After all, if
happiness leads to complacency, being complacent may be good signal that your genes are strong.
This suggests a strong reverse causation flowing from happiness to success, which will tend to
confound cross-section attempts to estimate the affect of earnings on happiness.

The Prospect of Happiness

If it is the prospect of happiness that motivates us, rather than its achievement, we should think of
people as aiming for ex-ante happiness rather than ex-post happiness. Luckily, since it is ex-ante
happiness that is the basis for decision-making, modern economics doesn’t have to throw away all
its carefully constructed ideas about decision-making and ordinality.

Happiness as an evolutionary phenomenon is likely to be a stationary stochastic process subject to
unpredictable shocks and with a rapid speed of adjustment back to ‘steady-state’ or ‘permanent’
happiness. For this reason, the correlations reported in the SWB literature may be misleading.

  Gavin Cameron is a University Lecturer in Economics at the University of Oxford and an Official Fellow of Lady
Margaret Hall, Oxford. This research was funded by ESRC grant number R00023 7500, ‘Modelling Non-
Stationarity in Economic Time-Series’. I am grateful to Cecilia Garcia-Penalosa, Louise Keely, David Myatt,
Jonathan Temple, Christopher Wallace for helpful discussions. My web address is:
  Further information is available from
For example, I’ve already mentioned (as does Professor Oswald’s paper2) that causation could well
be flowing from happiness towards success rather than vice-versa.

In addition, if measured SWB consists of a permanent and a transitory component, only transitory
happiness (H) is going to rise with an income shock. But of course, income at time T is correlated
with income shocks at time T and therefore measured H is going to be correlated with income at
time T. But not at time T-1. The lack of genuine panel data is a problem in this literature.3,4

Psychologists Myers and Diener find that the effects on current SWB of both positive and negative
life events are largely gone after just 3 months and completely gone by 6 months. Even for victims
of spinal injuries or lottery winners.

This relates to Professor Ng’s discussion as well as to the notion of aspirations that Professor
Easterlin has written about. At this point, a Rawlsian might say that we should look at happiness
from behind the veil of ignorance.

What should concern us rather than SWB is a thought experiment along the following lines: would I
prefer to be born today or to be born at a particular point in the past, given that I do not know what
place I will occupy in society in either case?

This is related to what John Rawls called the Thin Veil of Ignorance. It seems clear that if I am to
keep my own preferences, I would always choose to be borne today. The hint for this is that if you
ask people what historical period they would like to live in, they will say something like 'I would like
to be Julius Caesar' rather than 'I would like to be a person drawn at random from the inhabitants
(not necessarily citizens) of Rome.' In terms of Professor Ng’s discussion of public goods, this
suggests that countries should concentrate on providing goods that would raise this probability and
hence raise Thin Veil Happiness.

The Pursuit of Novelty

Prof Keely’s insightful and provocative paper is essentially about the pursuit of novelty. Her formal
modeling is extremely helpful in clarifying many issues.

There are a number of assumptions underlying her model that are useful. First, her assumption that
psi is less than one, that is that there are decreasing returns to the stock of ideas, enables her model
to explain both a growing research sector and a constant rate of novelty. There is also an assumption
of constant returns to the number of researchers, which I believe does not affect her results.

However, it is the form of the utility function that is of most interest. One possible but less tractable
alternative is that people get utility from shocks to novelty, that is, that over time the effect of a
constant rate of introduction of new varieties wears off. I would also be interested to hear more
about whether there is a knife-edge situation where positive population growth is just fast enough to
offset the fall in average consumption so that utility is constant.

Lastly, in steady-state the model predicts a very large research sector. What is happening to utility in
that steady-state?

  Further information is available from
  This idea, of course, is just an application of Milton Friedman’s reconciliation of time-series and cross-section
evidence on consumption.
  Professor Clark’s paper is the first in this literature to use panel data, as far as I am aware.
More broadly we might ask what explains changes in the maximum proportion of expenditure on
novelty? As technological progress reduces the proportion of spending that is necessary to satisfy
the basic material needs discussed by Abraham Maslow, the proportion available for novelty

The Pursuit of the Jones’

Moving from the pursuit of novelty, Professor Ng’s paper focuses on the pursuit of the Jones’. Here
we must ask how people judge themselves relative to others? For example, do they compare their
consumption with that of the average person or with that of the entire distribution of people?

Professor Ng also mentions the problem of excessive discounting. People do seem to discount the
future at too high a rate and this seems inexplicable. However, in an evolutionary setting, the role of
the discount rate becomes obvious. It is simply something like a hazard rate that reflects the
probability of death. With life expectancies more than double those of our forbears and with people
able to have children much later in life, if we had a hard-wired hazard rate from our evolutionary
past it would be much too high.

Professor Ng discusses the seeming paradox that “a wider distribution of others’ income often
increases individual well-being”. If reproductive success is a winner-takes-all affair then it is not
surprising that people (specifically, men) pursue excessively risky strategies and that they worry
about the shape of the distribution as well as their position in it.

Professor Ng also suggests that an ‘irrational materialistic bias’ pervades society. There may well be
a materialistic bias, and it may well be bad for society, but from an individual stand-point, it is
entirely rational to play a non-cooperative materialistic strategy even if society would prefer a
cooperative outcome.

Concluding Remarks

The answer seems to be to try to change the games that people play rather than to change people
themselves. There are many structures in modern life that serve to weaken the opportunities for
cooperation and reciprocal altruism. It is the abundance of strangers and the lack of repeated
interaction in modern societies that encourages non-cooperative strategies. Sigmund Freud said
something along those lines in “Civilization and Its Discontents”, and that was a long time ago.

    Further information is available from

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