Monday, January 05, 2004

Chained by Choice

An article by Barry Schwartz in yesterday’s Parade magazine says that people can actually be made worse off by having more options (the full text is apparently not available online). According to the conventional wisdom of economics, Schwartz’s claim verges on nonsense: In most microeconomic models of choice, it’s logically impossible to decrease a person’s well-being by increasing the size of his choice set. But the article argues otherwise. Here’s a sampler of the article’s claims:

• “But if the number of choices keeps growing, negative effects start to appear. As choices grow further, the negatives can escalate until we become overloaded. At this point, choice no longer paralyzes us; it might even be said to tyrannize.”
• “At any large drugstore, you’ll find 80 types of painkillers, 40 kinds of toothpaste. … A choice that once took only 5 minutes now could take most of the day.”
• “The American ‘happiness quotient’ has been going gently but consistently downhill for more than a generation. In the last 30 years – a time of great prosperity – the proportion of the population describing itself as ‘very happy’ has declined. The decline was about 5%. This might not seem like much, but 5% translates into about 14 million Americans.”
• “Here we are, living at the pinnacle of human possibility, awash in material abundance. We get what we say we want, only to discover that it doesn’t satisfy us. The success of 21st-century life turns out to be bittersweet. And I believe that a significant contributing factor is the overabundance of choice.”

The notion that more options can make us worse off is not a logical impossibility, but I’m highly skeptical of its importance. In defense of the standard economic view, consider the following:

• If the burden of choice is too great, you can nearly always discard some portion of the choice set. Pick the first outfit you pull out of the closet. Buy the first can of coffee you see on the shelf. Go with the waiter’s recommendation at the restaurant.
• The process of searching for something – the best pair of jeans, a better job – often generates net benefits, at least in expected value. Otherwise, we could just terminate the search earlier. The fact that a choice that would have taken you 5 minutes now takes longer does not, in itself, indicate that you’re worse off, because you will only incur the added search time if the increase in value you expect to get exceeds the cost of search.
• Sometimes the search itself is enjoyable. If someone spends a whole day looking for a pair of jeans, I’m betting that person actually enjoys shopping.

The most plausible argument in support of Schwartz’s position is not that your own larger choice set makes you worse off, but that others’ larger choice sets do. The reason is that you might measure your happiness in relative terms, so that if everyone gets better off (say, wealthier) by an equal amount in absolute terms, nobody’s actually any happier. This approach transforms a positive-sum game (everyone can improve their condition) to a zero-sum game (one person’s gain is another person’s loss). But even if that’s part of the story, it’s nowhere near the whole story. I enjoy my DVD player immensely, not because I have one and others don’t (almost everyone I know has one now), but because I enjoy the superior picture and sound quality, the ability to turn captions on and off, etc.

Surveys like the one mentioned above, showing that fewer people are “very happy” than 30 years ago, don’t really show that people are worse off or that people only measure happiness in relative terms. On the contrary, it might be that people engage in benchmarking: they look toward the success of others to gauge how well they are doing relative to their potential. If lots of other people around me are managing to achieve more with similar initial resources, that’s a valuable signal that I could possibly be happier than I am. Knowing this, I might be reluctant to classify myself as “very happy” when I know I have the potential to be happier. Thus, we may rely on a relative definition of happiness to answer survey questions, but declining scores might merely indicate that people now have more unexploited opportunities to improve their absolute happiness than they did before. It does not follow that their absolute happiness level has fallen.

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