The ‘American paradox’ (Myers, 2000) refers to the phenomenon that, despite an increase in wealth across the globe over the past 50 years, happiness levels have stayed the same.
There are several explanations for this. The first is the Relative Standards Model, which is reasonably well supported. Subjective wellbeing is primarily a function of comparison processes (social comparison, with past self, with internalized standards).
When we interact with others, we can’t help but compare ourselves to them on many levels. Otherwise termed as social comparison, we can compare our situation, attractiveness and wealth to others either in an upward or downward spiral. Ultimately, we tend to seek out and interact with people who make us feel good about ourselves and not people who make us feel bad. Thus, our brand new designer handbag is only great until we see a bigger, more expensive and new season one on a friend. On the other hand, if we see a friend with a less expensive handbag, we will feel better about our status and ourselves.
Our personality may influence whether we use downward or upward social comparison and how we use it. The cancer patients that Kate has worked with use it in both ways, however in a positive way. They use upward social comparison when looking at cancer patients who have finished chemotherapy and think, ‘someday that will be me’. Alternately, they will look around at fellow patients, some who are younger, with children, and think ‘well at least I got it now, rather than when I was young, like them’. Thus, social comparison is only detrimental if you use it to negatively evaluate yourself with others.
Status anxiety and materialism have been linked to increased instances of depression and lowered SWB. Diener and Oishi (2000) found that placing high importance on money correlates inversely with life satisfaction (⫺0.53) whereas placing high value on love correlates positively with life satisfaction. Some scholars go even further and claim that materialistic attitudes can be equated to a virus called affluenza that causes dissatisfaction and worthlessness, crippling our lives. Although originally a metaphorical expression, affluenza seems to have its roots in rigorous research findings (James, 2007).
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Previous beliefs were that striving for material goods does not meet basic human needs (see SDT) and that materialistic goals may be unattainable. Furthermore, unhappiness and low social support might lead to compensatory materialism.
However, an argument against the detrimental effects of materialism is that materialism is only bad if you can’t afford it. Thus, those who report being higher on materialism with higher incomes report higher wellbeing (Crawford et al., 2002). As long as you live within your means and can afford what you like without the financial strain, materialism isn’t as detrimental as previously believed.
Linked to discrepancy theory is the paradox of choice (Schwartz and Ward, 2004).
As nations become richer and consumers become more demanding, our world is packed with choice, alternatives and variations to most everything for sale. Freedom of choice has now been replaced with the ‘tyranny of freedom’, where more choice isn’t necessarily a good thing (Schwartz, 2000; Schwartz et al., 2002).
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an you recall a time when you wanted to buy a specific item, a new computer for example? How many choices were there? Did this make things easier or harder on your final decision?Think about it…
An abundance of choice has lead to three leading problems for consumers and citizens of Western societies. These include:
■ Information problems. We are swamped with information, which leaves us in a precarious position; how can we possibly gather all we need to know in order to make an educated choice?
■ Error problems. If we are not able to access all information about all the possible choices, we are likely to make more errors of judgement.
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aken from a well-known economic query (Solnick and Hemenway, 1998) to test the rationality of individuals and finance, please answer the following questions:Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000 a year while other people get $250,000?
Assume for the moment that prices of goods and services will stay the same.
What did you say? Would it surprise you to know that the majority of people who are asked this question would prefer the first scenario? Why do you think this is?
Think about it…
■ Psychological problems. The stress and anxiety caused by excess choice and the above issues can create lowered levels of psychological wellbeing.
Of course, introducing choice is not necessarily the issue here; it is introducing too much choice that seems to affect one’s levels of happiness.
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he supermarket is riddled with choice. We can have any type of food, any way we want it and packaged how we like it. However, the jams experiment showed that sometimes we can get too much of a good thing.Taking place in an ordinary grocery store, researchers set up a stand to allow shoppers to taste test a selection of jams. The demonstration had two conditions. One had six types of jams, whereas the second had 24. The results of observation analysis showed that more shoppers stopped in front of the extensive-selection display of jams (60 per cent) than in front of the limited selection (40 per cent). Furthermore, the two stands experienced similar sampling statistics (1.5 flavours). However, when it came to actually choosing and purchasing a jam, shoppers who confronted the display of 24 jams were less likely to purchase any than when they encountered the display of six (3 per cent versus 30 per cent). Researchers suggest that too much choice can cause anxiety and decreased wellbeing.
See Iyengar and Lepper (2000) for the original article.
JAMS
When it comes to decision-making, Schwartz has separated individuals into two categories: satisficers versus maximizers. Satisficers are individuals who are able to choose items that meet their minimum criteria and go for ‘what’s good enough’.
Maximizers, on the other hand, are individuals who fixate on searching for all the possible options and look for the best possible choice. Accordingly, maximizers have a more difficult time making choices as they need to make sure they have covered all options.
Furthermore, researchers have identified that there are several pitfalls associated with being a maximizer including:
■ Regret at not getting the best choice or anticipating regret in the future.
■ Opportunity costs. Inevitably, when we choose one thing, we automatically reject the other. Each choice has a cost in itself.
■ Escalation of expectations. As the choices available to us rise, so do people’s expectations.
■ Self-blame. Since we have so much choice available to us, we believe it is our own fault if things go wrong.
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■ Time. The hours people spend sifting through the multitude of choice takes away from the time spent on more worthwhile pursuits.
There is some financial gain in being a maximizer (on average they obtain starting salaries $7000 higher than satisficers), however they are also unhappier, experiencing higher levels of regret, perfectionism, depression, upward social comparison and neuroticism.