Affective forecasting, also known as hedonic forecasting or the hedonic forecasting mechanism, is the prediction of one's affect (emotional state) in the future. As a process that influences preferences, decisions, and behavior, affective forecasting is studied by both psychologists and economists, with broad applications.
History In The Theory of Moral Sentiments (1759), Adam Smith observed the personal challenges, and social benefits, of hedonic forecasting errors:
[Consider t]he poor man's son, whom heaven in its anger has visited with ambition, when he begins to look around him, admires the condition of the rich …. and, in order to arrive at it, he devotes himself for ever to the pursuit of wealth and greatness…. Through the whole of his life he pursues the idea of a certain artificial and elegant repose which he may never arrive at, for which he sacrifices a real tranquillity that is at all times in his power, and which, if in the extremity of old age he should at last attain…, he will find to be in no respect preferable to that humble security and contentment which he had abandoned for it. It is then, in the last dregs of life, his body wasted with toil and diseases, his mind galled and ruffled by the memory of a thousand injuries and disappointments..., that he begins at last to find that wealth and greatness are mere trinkets of frivolous utility….
[Yet] it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind.
In the early 1990s, Kahneman and Snell began research on hedonic forecasts, examining its impact on decision making. The term "affective forecasting" was later coined by psychologists Timothy Wilson and Daniel Gilbert. Early research tended to focus solely on measuring emotional forecasts, while subsequent studies began to examine the accuracy of forecasts, revealing that people are surprisingly poor judges of their future emotional states. For example, in predicting how events like winning the lottery might affect their happiness, people are likely to overestimate future positive feelings, ignoring the numerous other factors that might contribute to their emotional state outside of the single lottery event. Some of the cognitive biases related to systematic errors in affective forecasts are focalism, hot-cold empathy gap, and impact bias.
Applications While affective forecasting has traditionally drawn the most attention from economists and psychologists, their findings have in turn generated interest from a variety of other fields, including happiness research, law, and health care. Its effect on decision-making and well-being is of particular concern to policy-makers and analysts in these fields, although it also has applications in ethics. For example, one's tendency to underestimate one's ability to adapt to life-changing events has led to legal theorists questioning the assumptions behind tort damage compensation. Behavioral economists have incorporated discrepancies between forecasts and actual emotional outcomes into their models of different types of utility and welfare. This discrepancy also concerns healthcare analysts, in that many important health decisions depend upon patients' perceptions of their future quality of life.
Overview Affective forecasting can be divided into four components: predictions about valence (i.e. positive or negative), the specific emotions experienced, their duration, and their intensity. While errors may occur in all four components, research overwhelmingly indicates that the two areas most prone to bias, usually in the form of overestimation, are duration and intensity. Immune neglect is a form of impact bias in response to negative events, in which people fail to predict how much their recovery will be hastened by their psychological immune system. The psychological immune system is a metaphor "for that system of defenses that helps you feel better when bad things happen", according to Gilbert. On average, people are fairly accurate about predicting which emotions they will feel in response to future events. However, some studies indicate that predicting specific emotions in response to more complex social events leads to greater inaccuracy. For example, one study found that while many women who imagine encountering gender harassment predict feelings of anger, in reality, a much higher proportion report feelings of fear. Other research suggests that accuracy in affective forecasting is greater for positive affect than negative affect, suggesting an overall tendency to overreact to perceived negative events. Gilbert and Wilson posit that this is a result of the psychological immune system.
While affective forecasts take place in the present moment, researchers also investigate its future outcomes. That is, they analyze forecasting as a two-step process, encompassing a current prediction as well as a future event. Breaking down the present and future stages allow researchers to measure accuracy, as well as tease out how errors occur. Gilbert and Wilson, for example, categorize errors based on which component they affect and when they enter the forecasting process. In the present phase of affective forecasting, forecasters bring to mind a mental representation of the future event and predict how they will respond emotionally to it. The future phase includes the initial emotional response to the onset of the event, as well as subsequent emotional outcomes, for example, the fading of the initial feeling.
When errors occur throughout the forecasting process, people are vulnerable to biases. These biases disable people from accurately predicting their future emotions. Errors may arise due to extrinsic factors, such as framing effects, or intrinsic ones, such as cognitive biases or expectation effects. Because accuracy is often measured as the discrepancy between a forecaster's present prediction and the eventual outcome, researchers also study how time affects affective forecasting. For example, the tendency for people to represent distant events differently from close events is captured in the construal level theory.
The finding that people are generally inaccurate affective forecasters has been most obviously incorporated into conceptualizations of happiness and its successful pursuit, as well as decision making across disciplines. Findings in affective forecasts have stimulated philosophical and ethical debates, for example, on how to define welfare. On an applied level, findings have informed various approaches to healthcare policy, tort law, consumer decision making, and measuring utility (see below sections on economics, law, and health).
Newer and conflicting evidence suggests that intensity bias in affective forecasting may not be as strong as previous research indicates. Five studies, including a meta-analysis, recover evidence that overestimation in affective forecasting is partly due to the methodology of past research. Their results indicate that some participants misinterpreted specific questions in affective forecasting testing. For example, one study found that undergraduate students tended to overestimate experienced happiness levels when participants were asked how they were feeling in general with and without reference to the election, compared to when participants were asked how they were feeling specifically in reference to the election. Findings indicated that 75%-81% of participants who were asked general questions misinterpreted them. After clarification of tasks, participants were able to more accurately predict the intensity of their emotions
Major sources of errors Because forecasting errors commonly arise from literature on cognitive processes, many affective forecasting errors derive from and are often framed as cognitive biases, some of which are closely related or overlapping constructs (e.g. projection bias and empathy gap). Below is a list of commonly cited cognitive processes that contribute to forecasting errors.
Major sources of error in emotion Impact bias
One of the most common sources of error in affective forecasting across various populations and situations is impact bias, the tendency to overestimate the emotional impact of a future event, whether in terms of intensity or duration. The tendencies to overestimate intensity and duration are both robust and reliable errors found in affective forecasting.
One study documenting impact bias examined college students participating in a housing lottery. These students predicted how happy or unhappy they would be one year after being assigned to either a desirable or an undesirable dormitory. These college students predicted that the lottery outcomes would lead to meaningful differences in their own level of happiness, but follow-up questionnaires revealed that students assigned to desirable or undesirable dormitories reported nearly the same levels of happiness. Thus, differences in forecasts overestimated the impact of the housing assignment on future happiness.
Some studies specifically address "durability bias," the tendency to overestimate the length of time future emotional responses will last. Even if people accurately estimate the intensity of their future emotions, they may not be able to estimate their duration. Durability bias is generally stronger in reaction to negative events. This is important because people tend to work toward events they believe will cause lasting happiness, and according to durability bias, people might be working toward the wrong things. Similar to impact bias, durability bias causes a person to overemphasize where the root cause of their happiness lies.
Impact bias is a broad term and covers a multitude of more specific errors. Proposed causes of impact bias include mechanisms like immune neglect, focalism, and misconstruals. The pervasiveness of impact bias in affective forecasts is of particular concern to healthcare specialists, in that it affects both patients' expectations of future medical events as well as patient-provider relationships. (See health.)
Expectation effects Previously formed expectations can alter emotional responses to the event itself, motivating forecasters to confirm or debunk their initial forecasts. In this way, the self-fulfilling prophecy can lead to the perception that forecasters have made accurate predictions. Inaccurate forecasts can also become amplified by expectation effects. For example, a forecaster who expects a movie to be enjoyable will, upon finding it dull, like it significantly less than a forecaster who had no expectations.
Sense-making processes Major life events can have a huge impact on people's emotions for a very long time but the intensity of that emotion tends to decrease with time, a phenomenon known as emotional evanescence. When making forecasts, forecasters often overlook this phenomenon. Psychologists have suggested that emotion does not decay over time predictably like radioactive isotopes but that the mediating factors are more complex. People have psychological processes that help dampen emotions. Psychologists have proposed that surprising, unexpected, or unlikely events cause more intense emotional reactions. Research suggests that people are unhappy with randomness and chaos and that they automatically think of ways to make sense of an event when it is surprising or unexpected. This sense-making helps individuals recover from negative events more quickly than they would have expected. This is related to immune neglect in that when these unwanted acts of randomness occur people become upset and try to find meaning or ways to cope with the event. The way that people try to make sense of the situation can be considered a coping strategy made by the body. This idea differs from immune neglect due to the fact that this is more of a momentary idea. Immune neglect tries to cope with the event before it even happens.