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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. Kahneman and Snell began research on hedonic forecasts in the early 1990s, examining its impact on decision-making. The term affective forecasting was later coined by psychologists Timothy Wilson and Daniel Gilbert. While early research tended to focus solely on measuring emotional forecasts, subsequent studies also 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, empathy gap, and impact bias. 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 healthcare. 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, the tendency to underestimate our 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 emotional valence (i.e. positive or negative), the specific emotions experienced, their duration, and their intensity.[1] 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.[2][3] Immune neglect is a form of impact bias in response to negative events whereby people fail to predict how much their psychological immune system will hasten their recovery. On average, people are fairly accurate about predicting which emotions they will feel in response to future events.[1] 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.[4] Other research suggests that accuracy in affective forecasting is greater for positive affect than negative affect,[5] suggesting an overall tendency to overreact to perceived negative events. Gilbert and Wilson posit that this is a result of our psychological immune system. While affective forecasts take place in the present moment, researchers also investigate its future outcomes.[3][6][7] 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.[1] 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.[1] Focus on how errors occur reveal a vulnerability to bias throughout the forecasting process. 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.[7] For example, the tendency for people to represent distant events differently from close events is captured in construal level theory.[8] The finding that people are generally inaccurate affective forecasters has been most obviously incorporated into conceptualizations of happiness and its successful pursuit,[9][10] as well as decision-making across disciplines.[11][12] Findings in affective forecasts have stimulated philosophical and ethical debates, for example, on how to define welfare.[13] On an applied level, findings have informed various approaches to healthcare policy,[11] tort law,[14] consumer decision-making,[15] and measuring utility[3] (see below sections on psychology, economics, law, and health). Major sources of errors Because forecasting errors commonly arise from literature on cognitive processes,[2][16][17] 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. Impact bias One of the most common sources of error in affective forecasting across various populations and situations is the impact bias, which is the tendency to overestimate the emotional impact of a future event, whether in terms of intensity or duration.[1][16] For example, studies have found that college students overestimated how happy or unhappy they would be after being assigned to a desirable or undesirable dormitory.[18] Impact bias has also been found in retroactive assessments of the past events.[1] Proposed causes of impact bias include mechanisms like immune neglect[2] and focalism,[18][19] as well as misconstruals. For example, using highly available, but unrepresentative past memories, increases the impact bias.[20] 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.) Some studies specifically address "durability bias", the overestimation of the length of emotional responses to future events.[15] Focalism Focalism (or the "focusing illusion") occurs when people focus too much on certain details of an event, ignoring other factors.[21] Research suggests that people have a tendency to exaggerate aspects of life when focusing their attention on it.[3] A well-known example originates from a paper by Kahneman and Schkade, who coined the term "focusing illusion" in 1998.[22] They found that although people tended to believe that someone from the Midwest would be more satisfied if they lived in California, results showed equal levels of life satisfaction in residents of both regions. In this case, concentrating on the easily observed difference in weather bore more weight in predicting satisfaction than other factors.[22] Various studies have attempted to "defocus" participants, with mixed results depending on methods used. One successful study asked people to imagine how happy a winner of the lottery and a recently diagnosed HIV patient would be.[6] The researchers were able to attenuate focalism by exposing participants to detailed and mundane descriptions of each person's life. These participants subsequently estimated similar levels of happiness for the HIV patient as well as the lottery-winner, as opposed to control participants, who made unrealistically disparate predictions of happiness. Immune neglect Gilbert et al. originally coined the term "immune neglect" (or "immune bias") to describe a function of the psychological immune system. Immune neglect refers to forecasters' unawareness of their tendency to adapt to and cope with negative events.[2][23] Subsequent research has indicated that having more effective coping strategies is correlated with greater biases in forecasting negative events, while having ineffective coping strategies is correlated with greater biases in forecasting positive events.[24][25] Projection bias Projection bias is the tendency to falsely project current preferences onto a future event.[26] Within economics, projection bias relates to utility, habit formation, and consumptive behavior. For example, when deciding whether or not to smoke cigarettes, people may predict how their current consumption will affect their future preferences. Projection bias, then, could help to enable habit-forming behavior like smoking by leading people to systematically underestimate future drawbacks.[26] Projection bias can arise from empathy gaps (or hot/cold empathy gaps), which occur when the present and future phases of affective forecasting are characterized by different states of physiological arousal, which the forecaster fails to take into account.[1][3] For example, a forecaster in a state of hunger is likely to overestimate how much they will want to eat later, overlooking the effect of satiation on future preferences. As with projection bias, economists use the visceral motivations that produce empathy gaps to help explain impulsive or self-destructive behaviors, such as smoking.[27][28] Miscontruals "Construal level theory" theorizes that distant events are conceptualized more abstractly than immediate ones.[8] Thus, psychologists suggest that a lack of concrete details prompts forecasters to rely on more general or idealized representations of events, which subsequently leads to simplistic and inaccurate predictions.[29] For example, when asked to imagine what a 'good day' would be like for them in the near future, people often describe both positive and negative events. When asked to imagine what a 'good day' would be like for them in a year, however, people resort to more uniformly positive descriptions.[8] Gilbert and Wilson call bringing to mind a flawed representation of a forecasted event the misconstrual problem. Framing effects, environmental context, and cognitive heuristics (such as schemas) can all affect how a forecaster conceptualizes a future event.[12][16] For example, the way options are framed affects how they are represented: when asked to forecast future levels of happiness based on pictures of dorms they may be assigned to, college students use physical features of the actual buildings to predict their emotions.[1] In this case, the framing of options highlighted visual aspects of future outcomes, which overshadowed more relevant factors to happiness, such as having a friendly roommate. Time discounting Time discounting (or time preference) is the tendency to weigh present events over future ones. Applied to affective forecasting, this helps explain why people underestimate the intensity of future events, a phenomenon called "future anhedonia".[30] Forecasts of the duration of feelings often capture the tendency for emotions to fade over time, but underestimate the speed in which this happens.[5] Economists often cite time discounting as a source of mispredictions of future utility.[31] Expectation effects Previously formed expectations can alter emotional responses to the event itself, motivating forecasters to confirm or debunk their initial forecasts.[1][32] In this way, 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.[33] Memory Affective forecasters often rely on memories of past events. However, predictions hinge on the accuracy of remembering past experiences. Various studies indicate that retroactive assessments of past experiences are prone to various errors, such as duration neglect[3] or decay bias. People tend to overemphasize the peaks and ends of their experiences when assessing them (peak/end bias), instead of analyzing the event as a whole. For example, in recalling painful experiences, people place greater emphasis on the most discomforting moments as well as the end of the event, as opposed to taking into account overall duration.[13] Retroactive reports often conflict with present-moment reports of events, further pointing to contradictions between the actual emotions experienced during an event and the memory of them.[3] In addition to producing errors in forecasts about the future, this discrepancy has incited economists to redefine different types of utility and happiness[13](see section on economics). Emotional evanescence Emotional evanescence refers to the general tendency for emotions to fade or decrease in intensity over time, which forecasters often overlook.[34] Some research suggests that all errors in affective forecasting derive solely from initial intensity bias, or the flawed estimation of an initial response to future events.[16] This bias may be mediated by context-specific variables. For example, forecasters who report being more in love with their partners exhibit greater errors in the forecasts of whether or not they will break up.[7] Other research suggests that accuracy in affective forecasting is greater for positive affect than negative affect.[5] A final related bias is fading affect bias, in which the emotions associated with unpleasant memories fade more quickly than the emotion associated with positive events.[35] Gilbert and Wilson posit that we overlook the reality of future adaptations to negative events as a result of our psychological immune system. In psychology Psychologists have traditionally focused on identifying how and why errors in affective forecasting arise, contributing significantly to the understanding of how different biases influence the process.[17][21] Psychological immune system Gilbert and Wilson coined the term "psychological immune system" to encompass a number of biases and mechanisms that protect people from experiencing extreme negative emotions.[24] This label draws on an analogy with the biological immune system.[36] These processes affect how the people process, transform or construct information, making the existing state of affairs more bearable and the alternatives more appealing.[37] The mechanisms of the psychological immune system act without conscious awareness, so people usually fail to anticipate its effects. This is one reason why people are poor at affective forecasting: they typically underestimate the extent to which these processes will shield them from a negative event.[24][36] Improving forecasts Preliminary studies have incorporate findings on cognitive biases and affective forecasting to investigate ways of "debiasing" forecasts. Approaches vary depending on which bias is targeted. For example, one study successfully "defocused" (i.e. reduced the impact of focalism) participants.[6] Researchers asked participants to imagine how happy a winner of the lottery and a recently diagnosed HIV patient would be. The researchers were able to attenuate focalism by exposing participants to detailed and mundane descriptions of each person's life. These participants subsequently estimated similar levels of happiness for the HIV patient as well as the lottery-winner, as opposed to control participants, who made unrealistically disparate predictions of happiness. A study focusing on decreasing impact bias employed mindfulness techniques, finding that mindfulness leads to more moderate forecasts and decreased susceptibility to impact bias.[38] Mediating factors Psychologists are interested in what types of factors mediate affective forecasting. Research suggests links between forecasting processes and extraversion and neuroticism, possibly because these personality traits affect baseline moods and both experienced and anticipated emotional reactions.[39] Other research has found that working memory and the perceived importance of a future event increase impact bias, but only for some individuals.[17] Other individual traits that lead to differences in forecasting accuracy are levels of attachment anxiety[40] and emotional intelligence.[41] Culture may also mediate affective forecasting. People from east Asian cultures exhibit less susceptibility to both impact bias and focalism.[42] Research has also investigated motivational components of affective forecasting,[43][44] suggesting that impact bias may be a result of an effort to motivate ourselves towards achieving goals. In economics Economists share psychologists' interests in affective forecasting insomuch as it affects the closely related concepts of utility,[3][13] decision making,[45] and happiness.[9][10][46] Utility Research in affective forecasting errors complicate conventional interpretations of utility maximization, which presuppose that to make rational decisions, people must be able to make accurate forecasts about future experiences or utility.[21] Whereas economics formerly focused largely on utility in terms of a person's preferences, the realization that forecasts are often inaccurate suggests that simple measuring preferences at a time of choice may be an incomplete concept of utility. Thus, economists such as Daniel Kahneman, have incorporated differences between affective forecasts and later outcomes into corresponding types of utility.[13] Whereas a current forecast reflects expected or predicted utility, the actual outcome of the event reflects experienced utility.[3] Decision-making Affective forecasting is an important component of studying human decision-making.[17] Research in affective forecasts and economic decision-making include investigations of durability bias in consumers,[15] predictions of public transit satisfaction,[47] and environmentally friendly decisions.[46] Broadly, the tendencies people have to make biased forecasts deviate from rational models of decision-making.[45] One application of affective forecasting research is in economic policy. Knowledge that forecasts, and therefore, decisions, are affected by biases as well as other factors (such as framing effects), can be used to design policies that maximize the utility of people's choices.[46] This approach is not without its critics, however, as it can also be seen to justify economic paternalism.[13] Prospect theory describes how people make decisions. It differs from expected utility theory in that it takes into account the relativity of how people view utility and incorporates loss aversion, or the tendency to react more strongly to losses rather than gains.[48] Some researchers suggest that loss aversion is in itself an affective forecasting error, since people often overestimate the impact of future losses.[49] Happiness and well-being Economic definitions of happiness are tied to concepts of welfare and utility, and researchers are often interested in how to increase levels of happiness in the population.[9] Affective forecasting provides a unique challenge to answering this question, and economists are split between offering more choices to maximize happiness, versus offering experiences that contain more objective or experienced utility.[13] Applying finding from affective forecasting research to happiness also raises methodological issues: should happiness measure the outcome of an experience, or the choice that is satisfied as a result of a forecast? For example, although professors may forecast that getting tenure would significantly increase their happiness, research suggests that in reality, happiness levels between professors who are or are not awarded tenure are insignificant.[45] Affective forecasting conflicts such as this one have also influenced theories of hedonic adaptation, which compares happiness to a treadmill, in that it remains relatively stable despite our forecasts.[36] In law Similar to how some economists have drawn attention to how affective forecasting violates assumptions of rationality, legal theorists point out that inaccuracies in these forecasts have implications in law that have remained overlooked. For example, jury awards for tort damages are based on compensating victims for pain, suffering, and loss of quality of life. However, findings in affective forecasting errors have prompted some to suggest that juries are over-compensating victims, since their forecasts overestimate the negative impact of damages on the victims' lives.[14] Some scholars suggest implementing jury education to attenuate potentially inaccurate predictions, drawing upon research that investigates how to decrease inaccurate affective forecasts.[50] In addition to influencing legal discourse on emotions,[50] tort damages, and welfare, Jeremy Blumenthal cites additional implications of affective forecasting in civil jury compensation, contract law, sexual harassment, health law, and capital sentencing.[51][52] The application of affective forecasting, and its related research, to legal theory reflects a wider effort to address how emotions affect the legal system. In health Affective forecasting has implications in health decision-making[11][53][54] and medical ethics and policy.[55][56] Research in health-related affective forecasting suggests that nonpatients consistently underestimate the quality of life associated with chronic health conditions and disability.[11][57] The so-called "disability paradox" states the discrepancy between self-reported levels of happiness amongst chronically ill people versus the predictions of their happiness levels by healthy people. The implications of this forecasting error in medical decision-making can be severe, because judgments about future quality of life often inform health decisions. Inaccurate forecasts can lead to patients refusing life-saving treatment in cases when the treatment would involve a drastic change in lifestyle, for example, the amputation of a leg.[11] A patient who falls victim to focalism would fail to take into account all the aspects of their life that would remain the same after losing a limb. Although Halpern and Arnold suggest interventions to foster awareness of forecasting errors and improve medical decision-making amongst patients, the lack of direct research in the impact of biases in medical decisions provides a significant challenge.[11] Research also indicates that affective forecasts about future quality of life are influenced by the forecaster's current state of health.[53] Whereas healthy individuals associate future low health with low quality of life, less healthy individuals do not forecast necessarily low quality of life when imagining having poorer health. Thus, patient forecasts and preferences about their own quality of life may conflict with public notions. Because a primary goal of healthcare is maximizing quality of life, knowledge about patients' forecasts can potentially inform policy on how resources are allocated.[53] Some doctors suggest that research findings in affective forecasting errors merit medical paternalism.[55] Others argue that although biases exist and should support changes in doctor-patient communication, they do not unilaterally diminish decision-making capacity and should not be used to endorse paternalistic policies.[56] This debate captures the tension between medicine's emphasis on protecting the autonomy of the patient and an approach that favors intervention in order to correct biases. Notable contributors See also References Further reading External links
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