The Science of Happiness and Ways to Live a Happier Life

On a thread a few months ago I remember reading a good thread by @thebrofessor and engaged in the conversation, but it was about life satisfaction and happiness and I just had too much to say to put into a comment on a narrow slice of that topic. So, with the holidays coming around and people getting back together with family and friends, it can be a stressful time and I wanted to share what I've learned. I'm pulling most of this information from a class I took in my MBA that was about the science of happiness (everything I mention is sourced from an academic study, feel free to reach out for further reading if you want to read up) and will add my own editorial comments as I see fit. Obviously, nothing I'm saying is the absolute truth, there are always exceptions, so take the comments as a broad gesture and please don't nitpick the examples I give.  

To start it off, there are three main determinants for happiness: 1) your natural set point, 2) your circumstance, and 3) intentional activity. They contribute about 50%, 10% and 40% respectively, so ultimately about 60% of your happiness is outside of your direct control (inasmuch as you can't change your circumstances which some people definitely can), this may seem depressing but reframe it as an opportunity to work on the 40% you can influence. That's still a significant portion of your life. To understand why we aren't happy we need to get to the root of the problem.

Why the things we think will make us happy don't: 

  • Social Comparison: We are natural comparison machines, we are always comparing ourselves to outside reference points, often in ways that defy traditional logic. Social comparison is so damaging because it's always a relative comparison. In a study that asked people if they would choose Scenario A (you get paid $50k and everyone else $25k) vs Scenario B (you make $100k and everyone else $250k) most of the group chose Scenario A. Being better than others is important to our self-esteem and what's dangerous is there is always someone a little richer, a little better looking, a little smarter, whatever it is, to always compare yourself to. A classic example to illustrate this point is bronze Olympic medalists often report higher levels of happiness compared to silver medalists. This can be explained by social comparison, the silver is kicking themselves over the fact that they just missed out on gold, while bronze is just happy to be on the podium, looking at the 7 other guys or gals who walk home empty handed.  
  • Hedonic Adaptation: This is the process of becoming accustomed to a positive (or negative) stimulus, such that the emotional affects become attenuated over time. Classic diminishing marginal returns. The sixth donut doesn't bring as much joy as the first one. Similarly, the 1,000th day driving your new car doesn't bring as much joy as the first one, ditto your new apartment, watch, etc. We adapt to the world around us, it's a good evolutionary trait, especially in the negative direction. You get a raise and your lifestyle creeps up, you get more free time and you waste it on Instagram, you marry someone you love and the normal banalities of life creep back in. Life can't be exceptional all the time, that would be overwhelming. So, buying your way out of your sadness won't help, and striking it rich so you can have the biggest house won't fill the gap in your life. Yes, there are ways more money can help (and I discuss how below) but just buying stuff doesn't help much since you adjust to it quickly and then are back at your baseline.
  • Impact Bias: We think all of these things will make us happier, but they don't. We do a terrible job at estimating how happy we will be given a certain event or purchase in the future. For example, you might think landing that job or buying that car will bring a lot of happiness, and in a small moment it might, but over a longer period of time we always overestimate the effect. This is often due to focalism, where we focus our attention and thoughts on a single thing to the exclusion of everything else. Getting the job might be tempered by a lower salary than you were expecting, or you just broke up with your girlfriend. Nothing in our lives happen in a vacuum, but we expect our happiness to react like it does. On the contrary, things that might loom large in your mind often don't impact your happiness as much as you think. Maybe your bonus wasn't as big as you wanted, but you still have a great weekend with the boys, or your girlfriend dumped you but you met a cuter girl at a party. Overall, your happiness is fairly stable (look to the 60% set point), and we often think it will change much more than it actually does.

So now that we understand three of the major impacts on our happiness, what can we do about it?  

  • Social Comparison: Lawyer Up, Delete Facebook, Hit the Gym. While trite, the deleting Facebook part is actually very helpful. One of the best ways to avoid ruining your mood by social comparison is to eliminate said comparison. You might think you're "engaging with friends" but you're mostly just scrolling and looking at other people's lives wondering why they're so happy but you aren't (hint: they aren't happy either, they're just making it look good for the camera). Avoiding social comparison entirely isn't possible, so other ways of reducing the impact is thinking about other people more holistically, remind yourself that other people have problems, your life is pretty great compared to a whole lot of other people (I do not say this as a common way of minimizing people's issues, but as a way for you to reflect on your own position). One way to think about this is vividly imagine what being with the "perfect person" would be like, after you get past all the nice stuff you realize there are negatives you didn't think about before, and this will reduce any longing for their life.  
  • Hedonic Adaptation: Probably the most relevant to this forum, and the big ones involve recognizing what actually brings you joy and focusing on that. Physical goods can bring fleeting happiness, and ways to extend that is to savor it. Instead of just plowing through that candy bar you just got, take time to actually enjoy each bite, it will last a lot longer both in reality and in your mind. Another major shift that can bring more happiness is to spend more on experiences than things, this bit of millennial stereotype is true. Save up for that vacation to Mexico or that ski trip to Lake Tahoe, it will be more enjoyable than buying a new watch (and that's coming from a huge watch nerd). And spend money in ways that give you more time, I don't do my own laundry because I value my time more than the $60/mo. it costs to go to a wash and fold. I could do a whole other post about the use of time, but suffice it to say that you should be conscious of your time use, and plan to maximize your pleasurable time and live it with intention. Don't let the day slip away just because you spent the whole afternoon on your phone.  
  • Impact Bias:  Once you can understand what gives you happiness and what doesn't (and this will take some serious reflecting, and possible journaling), focus your efforts on the things that do.  This sounds super obvious, and it partially is, but clearly a lot of people don't do the first step. Reflecting, meditating, and looking inward are difficult and require active effort to do successfully. We suffer from a thousand cognitive biases all the time, assuming your inner thoughts will surface without putting in the hard work is a fool's errand. Take the time to think about when you last truly felt happy and try to replicate it (hint: it will probably revolve around experiences with friends and family), spend the money to do it, spend the time. And lower your expectations, enjoy life on its own terms without demanding the unrealistic Hollywood ending, life is too messy for that, and it can be appreciated in all its imperfect glory.  

All of this is to say you have the tools at your disposal to build a happier life. This won't answer everything, there is a lot more I could go into (how to actually spend the free time you have, how to learn from happy people, how to refocus your outlook, etc.) and overall life satisfaction can be highly correlated with where you sit on Maslow's Hierarchy of Needs. But you can start taking small steps today that snowball into bigger ones tomorrow and find yourself living a new life in a year, you just need to put in the effort. (This is all separate from the very different conversation of clinically depressed individuals, I am in no way suggesting that people with a clinical diagnosis can just "effort" their way out of it, please see a doctor if you think you are seriously struggling with depression.) I hope at least one person finds this helpful, and I'm always open to chat if anyone needs to talk.  

Comments (24)

Fuhnance, what's your opinion? Comment below:

Thank you for the post, this was exactly what I needed today. Any book recommendations that touch on this further?

jarstar1, what's your opinion? Comment below:

This is the book of recommended reading my professor included in the course syllabus, most of these books are the pop version of their research (Note: I've only read Thinking Fast and Slow and Nudge and they're not really books about happiness, the rest I cannot vouch for): 

Daniel Gilbert, Stumbling on Happiness

Sonja Lyubomirsky, The How of Happiness

Jonathan Haidt, The Happiness Hypothesis

Martin E. P. Seligman, Flourish

Daniel Kahneman, Thinking Fast and Slow

Ed Diener & Robert Biswas-Diener, Happiness: Unlocking the Mysteries of Psychological Wealth

Abraham H Maslow, Toward a Psychology of Being

Richard Thaler & Cass Sunstein, Nudge

Most Helpful
jarstar1, what's your opinion? Comment below:

So there are two aspects of time, 1) money vs. time and 2) the use of the time you do have. I discussed a bit about the balance between time and money, at each extreme you end up unhappy. Too much time without money is miserable (a) you're poor and b) free, unstructured time becomes old after a while, just talk to anyone who has been involuntarily made unemployed) and too much money without time is just as bad (this has been discussed all the time on this forum). Once you find the balance that works for you, the second component becomes important. 

The first thing to note is that younger people value extraordinary experiences more whereas older people value ordinary experiences, this can be restated as people with more time left prefer extraordinary experiences and people with less time prefer ordinary ones. This is all relative, of course, when people shift their perception and perceive to have less time (for example, by comparing yourself to when your peak brain functioning occurs, around 40 or so, versus when your brain really starts to go, around 80 or so) they choose the ordinary experiences over the extraordinary ones. We seem to make more of our time and enjoy it more when it feels limited. One of the ways to shift your perception is to count out much time you have left. Say the average lifespan is 85 and you're 25 and you love skiing. Maybe you will stop because of physical deterioration or danger when you're 65, that means you have 40 more ski seasons left, that's it. When you approach your time this way you can learn to appreciate each trip more. Another example (one that hit me very hard when we discussed this in class, and ultimately has become one of my driving forces) is to think about how many more times you will see your parents. Mine probably have a solid 20 years left, but they live on the opposite coast, I maybe get 9-10 days with them over the course of the entire year. That's 200 days max I'll get to spend with my parents. It makes me appreciate each visit so much more, I turn my phone off and spend more time with them, I'm engaged and don't try to shrug them off, I make it count because there is so little time left. I am also planning long term to return to their coast, so hopefully the 9-10 days will get a lot bigger soon. 

Beyond your perception and mental shifts in your time, there are some behavioral things you can do too. One way is to simply eliminate your least happy activities, obviously this isn't always so simple, but if you can spend excess money to rid yourself of chores you dislike by hiring a cleaning lady or paying for your laundry, or can change jobs to a WFH situation so you don't need to commute, whatever it is, eliminating the unnecessary, unhappy activities is the quickest way to improving your overall mood.

The next action is to consolidate your unpleasant activities together, when you take multiple bad hits and put them all together the overall effect is less bad than if you took each one individually. Similarly, breaking up pleasant activities and spreading them up make each feel a bit better (remember, think about hedonic adaptation, eating 5 donuts at once is nice, but it would be nicer to have each one spaced two hours apart, right?), and lastly try to combine the good and bad ones to make the bad ones not so bad. For example, listen to podcasts or call up a friend when you're on your commute, try to do some work outside with a nice cup of coffee or tea, try to work on some of things you can change when doing activities you don't like and can't avoid. 

Next, manage your time for optimal variety. Studies have shown that spending too little time on something or spending too much time on it can both negatively affect your view of said activity. Playing 15 minutes of Xbox feels like you're barely getting into it and doesn't end up feeling fun, playing for 6 hours feels wasteful and strains your eyes, find the optimal amount of time for your activities and then switch it up, give yourself variety. This can also apply to work. If you have three things on your plate, don't necessarily try to tackle the first item all at once and only get to the second item when the first is finished, and so on (obviously this is subject to the level of engagement and duration of your work), but instead dedicate two hours for each item so you have enough time to get into the meat of it but not too much that you get burnt out. Switching engagement works your brain in different ways (taking a physical walk outside also helps a lot in resetting your brain) and helps keep you fresh. 

Lastly, turn the phone off, turn the TV off, close your laptop, put the Switch away, throw away your Tamagotchi (am I aging myself with that one?), and carve out some time to just exist without screens or "connectivity". Use it to enjoy your dinner, a conversation with a friend, or some reading you've been trying to get to.  As we've now been seeing with the Facebook papers, and what we've known intuitively for a long time now, digital media works to keep you engaged as much as possible eke as much eyeball time of you, and they do it by providing a constant drip of dopamine. They're like a slot machine. You put in 100 pennies and always win something in the double digits so it makes it looks like you're winning and keep playing. The bells and whistles are empty. Connecting back to physical reality helps you get in touch with your emotions, your thoughts, it lets you get back to your normal mode of thinking. 

MonkeyNoise, what's your opinion? Comment below:

I once heard in this discussion, and believe entire 100%, that happiness comes from your ratio of creating vs consuming.


- wood working

- writing

- starting a side hustle

- learning how to cook a new dish



- TV

- video games

- Buying stuff to make you happy

Similarly you should value YOUR OWN accomplishments over ones you have no control over. I like football, but it's more fun/enjoyable/memorable to get friends together to play a game of two hand touch at a park than watch pro athletes do the same EVEN WITH the skillset being infinitely better for the pros. Competition can be good and healthy. Find something you like and go after it. 

Just my 2 cents

FailedInFinance, what's your opinion? Comment below:

Great post! Just one comment: The "you get 50k and all the others 25k vs. 100/250k" concept is fundamentally flawed in my opinion. I would choose the former because if this was a real world scenario, inflation would leave you (and your 100k paycheck) in the dirt. I think a lot of people intuitively get this and hence favor option A. 

jarstar1, what's your opinion? Comment below:

I was hesitant to bring this example up because someone would comment this. The outcome isn't if the rest of the world is at $250k, but the people you know, or whoever your reference point it. It wouldn't matter if someone across the country you've never heard of makes that since it couldn't have any affect on you. The point is social comparison, not some macro analysis if incomes go up. Usually these scenarios include the implicit understanding that all else stays the same.

jarstar1, what's your opinion? Comment below:

OK, so my last response was a bit flippant, and I want to clarify, so I went to the original study and they in fact address your very concern. I want to point out two things, I was both correct and incorrect in my assumptions I mentioned in the other comment, I was correct in assuming they make everything else stays the same (though they make it explicit as we'll see) and incorrect in saying it would be only your immediate circle and people you know, the language of the study refers to "states of the world". The idea being that you understand you are relatively more or less well off than the average person *in your society*, which is definitely markedly different than what I was assuming. Here is the text from the Methods section of the study:

The survey consisted of twelve questions in the same format (see Appendix A). Each question presented two states of the world. In each state of the world, respondents were told how much they had of a certain good, bad, or personal attribute, and how much the typical other person in society had. Amounts were structured so that in one case, the `positional' case, the respondent had more than others in society. In the other case, the `absolute' case, amounts for both respondents and others were greater than in the positional case, but respondents had less than others in society. Two examples are given below:

A: Your current yearly income is $50,000; others earn $25,000.

B: Your current yearly income is $100,000; others earn $200,000. (Prices are what they are currently and prices (therefore the purchasing power of money) are the same in states A and B.)

A. You have 2 weeks of vacation; others have 1 week.

B: You have 4 weeks of vacation; others have 8 weeks

The results show 56% of respondents selected A for the first question and only 20% selected A in the second question. Other questions (for example about your child's attractiveness, or your own intelligence) all yield various numbers, the income question is pretty middle of the pack (80% of respondents chose their children's attractiveness to be relatively higher but lower absolute) and the vacation one has the lowest selection for relative betterment. The full study can be found here: 

PII: S0167-2681(98)00089-4 ( 

Pinstulol, what's your opinion? Comment below:

We are such a bunch of nerds, imagine normal people talking about the Science Of Happiness. Greatly appreciate though.

  • 1
StrattonOakmontPRHead, what's your opinion? Comment below:

Being grateful for what I have; that's my key to happiness.

StrattonOakmontPRHead, what's your opinion? Comment below:

Yep, agree too. I was just saying being grateful is a huge personal factor.

Great post, by the way, OP.

  • 1
MonkeyNoise, what's your opinion? Comment below:

Fortunately was able to realize some of this in my early 20s and course correct to a lifestyle that makes me happier/fulfilled.

Grew up with low self esteem so used academic and career performance to feel better as I compared myself to peers (sound familiar to anyone here?). What I quickly realized is that when you go 'up' a ladder you will just be surrounded by other people who are 'at your level'. You will never have that satisfaction of being better than everyone. Get the best grades in undergrad? Then get a good job surrounded by similar peers. Work hard? Then go to a elite grad school surrounded by similar peers. Get a better job working more? Surrounded by the same. So as OP stated being an Ivy grad of making X dollars at Y big name firm doesnt matter because everyone you interact with has that to some degree and you cope by looking down on others who probably dont even value that kind of stuff.

Not saying dont try, it's OK to strive for your best. But just make sure it's something YOU want and that you arent doing it solely to fill a hole, or because someone else wants you to (society, parents, significant other, etc). Of the people I worked with in finance I felt like half were genuinely bright people who loved what they did but the other half were pretty miserable, trying to fit a whole, and only do the job they do because it can give them a lifestyle they believe they need (not want) but still arent fulfilled. 

  • 5
re0330, what's your opinion? Comment below:

This is exactly what was in Jonathan Haidt's The Happiness Hypothesis. It was a great read. I would recommend it to anyone who is self reflective and wants to take more control of their happiness. 

Mando, what's your opinion? Comment below:

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