The Pursuit of Happiness

Pursuit of Happiness, is considered as important as life and liberty by Thomas Jefferson when he drafted the Declaration of Independence. Of course, I am not going to engage in such a high level political conversation now. I am going to take a more personal approach.

When I was young, I was indoctrinated to believe that the purpose of life is to bring justice to all serve the whole humanity. We are taught that we need to be healthy, not for ourselves, but to better serve the humanity. You might laugh at this, but that period of simple-mindedness was characterized by more happiness than the later period when I was more deliberate in pursuing happiness.

I started to take pursuit of happiness as my prime goal around high school. All else, like money, is subordinate to that. In sophomore year, when I was chatting with a professor about his different experience with jobs in private sector, government and academia, I asked bluntly:" Which job gave the best lifestyle?" That professor was amused and said "It is probably too early for you to consider that." He is probably right, for reasons I will explain later.

I will start with an anecdote.Walking back to home today is enlightening. I was checking the weather forecast the other day, and noticed that it gonna be very cold today with a possible snow storm. I was depressed because I anticipated that I will be miserable when I had to walk 45 min from school to home. I was agitated at the prospect of this suffering. It turned out I was, to my surprise, very happy during the commute. The snow storm, far from making me suffer, actually took the usual boredom of commute. It was more fun walking on the snow, slippery as it could be. My heart was buzzing for joy. It is amazing that when I left office, I was anticipating the worst and five minutes into the snow, I was elated.

May I suggest that happiness is mysterious?

I started thinking about this topic a long time ago. In my usual nerdiness, I started making predictions about what will make me happy. I divided them into three categories, short horizon(1 day), medium horizon (1 week-1 month) and long term horizon (1 year).  I am curious how accurate am I able to predict how happy I will be for different horizons.  For short horizon it is 63%, medium 46%, and long term 0%. The caveat is that I only have two observations for long term, so it is not precise estimate.

This is quite startling. I made plans to maximize happiness. I thought everything I did was in pursuit of happiness.

I am sure I am not alone in my pursuit of happiness, and I am not alone either to be frustrated by the elusive quest for happiness.

The sad/exciting truth is, this is no engineering problem that we can sit down, and find a solution. Happiness is a state of mind, and it is a gift. When we run after it, it might disappear. It pops us when we least expect it. The popular self-help literature does not lack advice. Do something fun. Have friends. Develop a hobby. Let go of negative feelings. Duh....Hobby is something we feel happy doing it. Friends are people we feel happy hanging out with. It is quite circular to give such advice. There are more: Exercise. Eat food that makes you happier. These pieces of advice remind me of someone who collect coupons to become a millionaire.

Why do I wrote this? It came out of my observation that by deliberately pursuing happiness, I am scaring it away. By being obsessed with happiness, I become anxious to achieve it, agitated in anticipation of potentially unhappy ordeals. The truth is, I know nothing. I do not know if something gonna make me happy or unhappy. If history is any guidance, a coin flip could do better for medium horizon prediction.  Yet, I planned for things, weighing trade-offs, and get tormented by my mentality. I was obsessed with making the choice that will make me happiest (or I thought will make me happiest). I got anxious about making the wrong choice, and anxious about not getting the first choice.

Before coming to Harvard, I was sure that I gonna suffer in winter. I gonna hate the winter commute (though I do realize that I am likely to enjoy winter sports). It turns out quite the opposite. This month, I led a very happy life.

It is perhaps time to let go. To let go of my pursuit of happiness so as to achieve true happiness. I am not an idealist, thinking that we should have no plans, and just let life takes us where it takes. I am however, letting go of obsession, the obsession to control. From my limited exposure to buddhist teaching, they preach that obsession （执） is the source of all pain.

Finally, I dedicate this blog to my Williams friends, in particular, Qiao Zhang , Sungik Yang, and Roshan Sharma who mysteriously brought so much happiness to my undergraduate years. It is not through alcohol or drugs, but through your mere presence.

Unknown unknowns

Larry Summers talked to our class today. His talk is usually wonderful. Though sometimes I disagree with what he said strongly, I love his talk nevertheless. Just as he said, a valuable paper/talk makes points that some people would disagree with rather than obvious things. I guess the public does not feel this way, or perhaps with the distortion inherent to the media, this advice might not be golden as far as public relation is concerned.

He mentioned unknown unknowns. Basically he is trying to illustrate that there are many factors (unknowns) that we are not even aware of when we make a judgment/estimate. Consequently, our estimates are overly confident. The obvious implication is that, when we make estimates, we should be cognizant of the fact, and in addition to allow for uncertainties around the factors we consider, but also allow for further uncertainties left out in our model (I usually call it "model risk").

I wish to make two points.

Three years ago, when I was writing a paper for a tutorial with Jerry Caprio, I thought about this and actually sent out a survey to investigate this further. I was shocked to find that, even when I remind people of the model risks, people choose to ignore it by and large. Most people felt pretty good about the decision, and when I did follow up, they usually tell me 1) yeah, I know, but I don't know how much difference the model risk gonna matter so I just ignored that 2) oh, I though model risk does not make much difference--models might be wrong, but it is not that wrong, right? so I ignore that. Well, as I noted in my paper that surveys are surveys, you cannot read much from this, because things might be different when people have real stakes involved.

Another thing is personal. I was quite hesitant to come to harvard for econ before August (I do not wish to discuss what changed my mind). I wrote down on a scale of 1-100 how happy I expect myself to be in different places and programs. Well, I probably should not disclose the results as one number that I did get to observe is grossly wrong. One important thing is the weather, I feel as outdoorsy as I was, I would be happier with the gorgeous weather in stanford. What is more, I love rural areas more. As it turned out, I am much happier than I could ever imagine after coming here. In the end, factors I never considered mattered dramatically. The people in my office are awesome, and I got to make friends with some people outside the program and outside my year. There are some other factors that I never thought would matter. but they mattered, to put it mildly. When I tried to make the decision, I probably realized that people around me matters, but not as important as it turned out to be. Part of it might be because I do not know anything about the people about me, so I choose to ignore it, or more precisely I choose to focus on what I can see concretely. I slightly considered the possibility that I might not have a clear picture with all factors considered, but in retrospect, I allowed too little room of error. In the end, it is a combination of some factors and my own realization that my forecast has always been wrong in the past that pushed me to discard my own forecasts and made the choice I did. What I learnt? Actually, not much or not that useful. at least it is not very reassuring to realize that we often optimize for nothing. but I probably will not through away an option that seems crappy at first sight. Yes, we never know.

The Loss of Innocence

I cannot help notice the difference, between when I was in elementary school and now.

Obviously, you say.

Yes, it is. But I do like to think about obvious things, as from "a grain of sand", we can see the world.

When I was young, I was care free. I eat what I like--no veggies, tons of butter, all sweet things. I could sit in front of TV for hours never feeling guilty.

Now, before I pick up the cookie this afternoon, words like diabetes flash through my mind. I still sit in front of TV (actually computers) for hours, but full of guilt. I make decisions carefully, painstakingly evaluating the links between cancer, high blood pressure, heart disease and all the things I love to do, and on top of that, I factor in model risks, statistical errors, publication bias....

So from no rules, I began to realize there are rules. And from there, I realize it is not enough to follow some simple rules, but rather a network of complicated rules, and finally, I am not even sure if those rules were accurate.

What a messed-up life! I confess it is, in some sense. You can probably tell, loss of innocence does not stop here. Career, family, love, social, and other aspects do not evade a similar fate.

Knowledge is power. I do not deny that, but it is seldom a power we can control nicely. More often than not, it is a burden.

When we talk about decision making in economics, we often speak of the kind of person as I was in elementary school as "naive agent", and we talk about them with contempt---we believe it is undesirable. Our mission is to inform those naive agent, let them come to grip with the reality, eliminate their irrational exuberance, push down their excessive optimism, and make them "educated". I was an advocate. I believed in the centrality of being informed.

But now I wonder. If a person can be free of worry for decades and the cost is a decade of low consumption, is it necessarily worse off? I would totally be up for that. I am aware some people do lots of welfare analysis for this kind of things, and show that it is not desirable. I think these people have a poor understanding of economic theory. Utility functions are used to model how people make decisions, and their values cannot be compared when it is a different person, or that same person's perspective changes. If we remember how utility function is constructed, it is so constructed that a person with a certain perspective, would act as if he is maximizing the utility function.