Monthly Archives: February 2012

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Learning from your mistakes requires seeing them

Have you ever planned a purchase, mulled it over, anticipated it, imagined how maybe it will bring something into your life that will make you a little bit happier and fulfilled – and then when you make the purchase, despite the fact that there’s nothing objectively wrong with it and it’s more or less everything you thought it should be, the allure and the appeal seems to dissipate kind of quickly? It seemed like it would be a fantastic purchase, like it fitted in perfectly with some aspect of your personality or lifestyle or whatever, but then when you got it – it’s just not conjuring up those joyous emotions. Yeah, it’s alright… I guess. It’s perfectly… nice. But it’s not thrilling and exciting and fulfilling. It’s just… there. Doing its thing, being an inanimate object, and you find your mind wandering, considering another potential purchase and imagining how it would bring a bit of extra happiness to your life…

The genesis of the problem is that humans are pretty bad at predicting their future emotions. When it comes to accurately imagining the emotions we will experience as a consequence of decisions we make or events we experience (a process known as affective forecasting, since it involves forecasting one’s affect) we’re just really not that good.

As if suffering from that particular blindspot wasn’t bad enough, it also turns out that we’re pretty bad at another thing: figuring out that our judgement was ever wrong. As reported in this paper in the Journal of Experimental Psychology, people are not only bad at making predictions about their future emotional states, but once they get to those emotional states, they’re bad at remembering what their predictions were in the first place.

In one particular experiment, looking specifically at happiness regarding important purchases, people firstly tended to make predictions that overestimated how happy they’d be after they made an intended purchase (you ask them beforehand how happy they think they’ll feel following the purchase, then get them back after the purchase and ask them how happy the purchase made them). Secondly, when you ask people to remember back to their predictions of how happy they would be due to the purchase, they misremember their prediction – they say that their prediction was less positive than it actually was. So, for example, they might predict that they’ll be very happy post-purchase, but then it turns out that they only feel moderately happy, but then they incorrectly remember their prediction and think that they had always predicted that they’d only be moderately happy. Their brain incorrectly remembers their prediction as being more accurate than it actually was.

It also turns out that the bigger the error in a person’s recall of their prediction (e.g. they predicted being very happy but ended up being not happy at all), the less likely they were to adjust their beliefs about the ability of purchases to make them happy in general. This results in people never realising that they’re consistently wrong about predicting how happy a purchase will make them, and continuing to assume that purchases will make them happy.

The killer is that even though people predicted they would be happier after making their intended purchase, there was no difference in happiness levels between the people who did make the purchase and those who didn’t end up making the purchase. In short:

People continue to make purchases that never make them as happy as they think they will, they never realise that this keeps happening, and they really could have saved themselves the trouble because it’s possible that they would have been just as happy all along if they hadn’t made any purchases at all.

As amazing as it is, the human mind can still be quite a disadvantageous thing sometimes.

Emotional consumption

I got into a discussion not so long ago on an online forum about the recent [multiple] price increases of Céline bags. The general consensus of others on the forum was that the price increases were “unfair” or “rude” and that they were making Céline products “elitist”. I argued that anything that is made to preclude the vast majority of people on Earth from participating could be considered elitist; the price of any single Céline product certainly does that. Unfortunately, people weren’t so interested in that perspective, as they continued to complain that the new US$2400 price-tag of the mini luggage bag is rude and elitist.

I was sympathetic that some people were actually complaining about the fact that they think the bags are not worth the new prices – fair enough, but that’s a different thing. But there were some people seemingly arguing that they been hard done by and disadvantaged by the fact that the bags had become slightly more inaccessible to them personally. I was kind of baffled, because despite all the emotions running very high in the discussion, an unaffordable bag is distinctly not an injustice. Pharmaceutical companies pricing critical medications out of the price range of people who need them – yes, that’s an injustice. You personally not being able to afford a Céline bag quite so easily (on top of the ones you already own, as is likely to be the case on that particular forum) – no, that doesn’t really qualify as an injustice at all.

But then I read a paper from the Journal of Consumer Culture that kind of threw some light on this behaviour. Class-based emotions and the allure of fashion consumption discussed the involvement of emotions in driving consumerism through the purchasing of fashion. We are all beholden to our emotions, and the desire to avoid or obtain a particular emotion drives our behaviour. Emotions don’t exist as detached things – as the paper says, “sentiments such as pride, shame, envy, resentment, compassion and contempt are not merely abstract and temporal emotions. [...] such sentiments are borne out of evaluative judgements that people make about how well they, or others, are being treated, and whether or not they have access to the things they consider affect their well being and happiness”.

The resentment and contempt people were showing for the Céline price increases – were they caused by some perception of being unfairly treated or being denied some sort of happiness? What sort of context could make someone upset that a luxury – by definition something far beyond the basics you need to survive – was being made less available to them?

If you’re like me, you might have thought that class structure is an increasingly irrelevant concept to fashion. You might think that the “democratisation of fashion” and the shift in luxury brands’ marketing strategies to target the enormous middle class means that the distinction between upper-class and middle-class is a bit blurry. There just aren’t as many material items these days that can pin someone definitively as belonging to one of those two classes. If someone’s got some disposable income and enough inclination and dedication to spend a fair bit of time saving up, they can have an Hermès Birkin bag (if they’ve gotten to the top of the waiting list, at least).

But the paper describes how, even if you just look at the middle class alone, there are divisions that could be the root of anxieties that drive some forms of consumerism.

People possess cultural capital – the cumulative body of education, knowledge, attitudes and skills that, for whatever reasons, are likely to give a person a higher social status in society. The paper reported that middle-class women (the paper only discussed women) with higher cultural capital were more likely to value their individuality in the personal appearance they created through fashion, and to think that following trends was not necessarily the most constructive use of their limited monetary funds. They were more likely to want to invest in classic styles, avoiding anything too trendy or ephemeral because such things would have a shorter lifetime of being associated with more “elite” tastes and social standings they considered aspirational. These women tried to engage in “smart shopping” by doing things like buying high-quality pieces on sale. And finally, they were less likely to be emotionally invested in their shopping – they weren’t necessarily doing it because they valued the emotional rewards it could potentially bring them in terms of improving how they are perceived by others.

Middle-class women with lower cultural capital didn’t engage in as much “smart shopping”, and in the example of Charlotte (well, they’re usually pseudonyms in these sorts of papers), she invested a lot of emotion in how others responded to her outfits, to the point where she found herself running down to the high street daily during her lunch time – 20 minutes there, 20 minutes of shopping, 20 minutes to get back to work – in order to buy more and more clothes. She had made the assumption that she’d only keep getting this positive feedback from people if she kept buying new outfits. As a result, she was frequently pushed up against the limits of her monetary funds and reminded of the fact that she was very much middle-class, despite whatever her aspirations may have been. And for middle-class people who are emotionally invested in their fashion purchasing, being pushed up against the limits of their middle-classness can be pretty aversive. It can generate some pretty negative emotions, as mentioned before, “borne out of evaluative judgements that people make about how well they, or others, are being treated, and whether or not they have access to the things they consider affect their well being and happiness”. Pushing up against those boundaries makes the boundaries seem unfair, and it feels like your access to things that affect your happiness is restricted.

And so we have the people of that Céline forum: outraged and resentful of price increases, even though the marketing department at Céline or its parent company, luxury conglomerate LVMH, are still very much aiming at the enormous middle-class and relying on its sheer size for their profits. But when a bag that previously cost the equivalent of 2 weeks’ worth of pay quickly progresses to costing 4 weeks’ worth of pay, middle-class consumers can’t help but be reminded of their financial boundaries, and the emotionally invested middle-class consumer is destined to feel outraged. The goal-posts have been unexpectedly shifted and it’s not just the bag that’s been moved out of your grasp for now – it’s the positive social emotions that you think the bag could bring that are also no longer within reach.

Doesn’t mean I empathise with these people, but I do now somewhat understand how their outrage can come about.

When hindsight is distinctly not beneficial

I’ve seen some disturbing instances of post-purchase rationalisation bias. This bias is what it says it is: it’s the tendency to rationalise a purchase after you’ve made it. The thing is, this bias is a type of choice-supportive bias – that means that when you evaluate a choice in hindsight, you tend to see the choice as better than perhaps it actually was. Maybe you were a bit uncertain about your choice as you were making it, but once it was made – oh no, it was definitely the right choice! It was so incredibly superior to the other option, no doubt about it. In fact, the other option was kind of awful, really. Lucky you’re so good at making awesome decisions!

So the post-purchase rationalisation bias means you tend to highlight the positive attributes of an item you’ve chosen to buy, since you probably consider the choice to have been a good one (otherwise you wouldn’t have made it, right?). That’s not to say that no one ever regrets a purchase, but this bias of the brain means that in most cases, you are more likely to try to see your choice as positive – particularly if the item was expensive.

It seems kind of harmless, since it’s presumably a good thing to make yourself happy with what you’ve ended up with, especially if you’ve invested a lot of money in it. Surely that’s preferable to always doubting your choice or lamenting not choosing the other option. However, the danger comes in not learning from one’s mistakes. If people (maybe me, maybe you, under the right circumstances) are willing to explain away negative aspects of their choices and over-emphasise the positive aspects, they put themselves at risk of making further poor (and expensive) choices in the future.

For example, I’ve seen a person explain away the handle falling off their expensive designer bag quite soon after purchase. They presumably reasoned that the bag must still be great because, well, they chose it and it cost that much, which led them to purchasing another of the same bag – just in a different colour this time. Was that a good decision? Well, it’s not my place to judge, but this bias does seem to lead to not learning from your mistakes – and then paying heftily for it. So if you’re interested in being a thoughtful consumer, maybe try to be as objective as possible when you’re evaluating your choices in hindsight. With this cognitive bias, the benefit of hindsight suddenly seems a bit more wayward and capricious than you would hope for from a so-called “benefit”.

Aristotle: on the money more than two millennia ago

We’re all aware of the sentiment that material things and ownership thereof aren’t the be all and end all of our little human lives and aren’t perhaps the most ideal sources of happiness. Aristotle was onto this thing more than two thousand years ago (“men fancy that external goods are the cause of happiness” – Book 7, Politics), so you would have to have your head buried very deeply in some very dense and tightly packed sand to not have heard of the notion.

What does science have to say on the matter, though? Empirical research can throw some light on where happiness stands when it comes to material goods or… an alternative to material goods.

Back in 2003, Van Boven and Gilovich from the University of Colorado conducted a study to look at what contributes more greatly to a person’s sense of happiness: material goods or life experiences? Does spending money on material items, like clothes or electronics, make you more or less happy than spending money on experiences, like going to a restaurant or a concert? Does having things bring more happiness than doing things, or is it the other way around?

They addressed this via several different surveys and experiments, asking a few different questions. In this post, I’ll just discuss the question they asked in their first experiment: quite simply, how happy are people with material purchases compared to experiential purchases? The results seem to suggest some truth to the millennia-old sentiment that material purchases might not be all they cracked up to be.

When asked about material or experiential purchases made over the value of US$100 in the previous month, it was found that people considered experiential purchases, compared to material purchases, to make them significantly more happy, to contribute more greatly to the happiness of their life, and to better represent money well spent.

The thing is, people were never asked to directly compare a material purchase of theirs to an experiential purchase of theirs – asking them to do that would perhaps set up a bias due to the negative stereotypes associated with materialism. You don’t want to seem shallow, so you would maybe rate your material-related happiness as less than your experience-related happiness. But what the researchers did was to ask people in one group to evaluate their personal material purchases, and to ask people in another group to evaluate their personal experiential purchases, with people having been assigned randomly to one group or the other. That’s how they found that the average happiness ratings for experiential purchases seemed to be significantly higher than the average ratings for material purchases.

Granted, this is just a comparison between two types of purchases, and this experiment did not look at whether buying material things made you happier than, say, not buying material things (there are a whole lot more factors to consider in that matter). But when you’re at that critical point of considering making a purchase, don’t think you can necessarily justify it by thinking of how happy it will make you. If you’re really designating your happiness as a crucial factor in the matter, you should perhaps consider reapportioning those funds to something a bit more experiential.