The joyless or the jobless

Great article from the economist at:

Here’s the first paragraph as a preview:
IN 2006 Richard Layard, an economist at the London School of Economics, argued that unhappiness was a bigger social problem in Britain than unemployment. In the “Depression Report”, which he co-wrote, Lord Layard pointed out that more people were claiming incapacity benefits because of depression and other mental disorders than were on the dole.

Listening to Doug Bernheim, he pointed out that there is a big problem with asking hypothetical questions like below:
“three economists from Cornell University, and Miles Kimball of the University of Michigan. They persuaded hundreds of people to answer conundrums such as: would you rather earn $80,000 a year and sleep 7.5 hours a night, or $140,000 a year with six hours’ sleep a night?”

The reporting bias in such questions is very high and people’s behavior is very different from their answers in many cases because. The reason is that they can fill in the hypothetical answer in any way they want and simplify it to an Option A or B answer for the interviewer.

I agree with Bernheim for the most part, but I think there is a weak correlation with such surveys and behavior, especially given they answered what they would actually do.

Leads me to 2 thoughts:
1. Either conformity bias is ridiculously high – people get high paying jobs because everyone else says more money is good
2. Or Utility and happiness are qualitatively two different things. Utility is more like excitement, like a sniff of cocaine, and happiness is not simply long term utility but something we haven’t quite specified in a model. Need to study some Buddhist monks to understand more about the economics of that sort of happiness.