our minds just don’t think in terms of absolutes. We just don’t think in terms of the true thing that’s out there. Instead, we think in these very relative terms. And we’re constantly judging relative to what I’m going to call a reference point. What do I mean by reference point? Well, it can mean all kinds of different things, but for the purpose of this, we’re going to talk in terms of this salient, but often completely irrelevant point against to which we’re judging something all the time. There’s a really cool illusion in vision. Some of you may have seen that involves such reference points. This is an illusion known as the Ebbinghaus illusion. Some of you guys seen this before. Show of hand? Some people not everybody? Well, the illusion comes when thinking about those orange circles in the center. So, which of the two orange circles do you think is the larger orange circle? Donora. Right side. One on the right. Yeah. Well, of course it’s an illusion. Someone messing with you guys, right? In fact, they are exactly the same size as you can see when I get rid of the circles. But because of the presence of these other circles on the outside, these are the reference point blue circles, we actually don’t see the circles at the same size, we can’t. Even though they’re absolutely the same size. We can only see them relative, so when you’re looking at this orange circle over here, you think, whoa that a circle must be super big, because all that blue circles around there are so small. And then when we look at the orange circle on the right, we think whoa that orange circles got to be really tiny, because look at how big the other circles are there. We’re not seeing in terms of absolutes. Whenever there’s a reference point on the side of something, we actually see it differently. This is this phenomenon in spades. We are constantly judging relative to other stuff out there in the world, and it messes up our judgement of what the thing we really care about. Our particular decision or a particular circle. What size, what magnitude, what awesomeness it really is. So that’s vision. The question is, do we actually see these kinds of reference points messing up our happiness judgments? Is it really the case that we judge the kinds of events that happen in our lives? And whether they’re great or not, relative to these kind of irrelevant other things. One of the most famous examples of this, was talked about by Medvec and his colleagues.
And it actually involves, like situations that people experience in real life. Some of you may watch these kinds of things, like sporting events like the Olympics. So, here’s one of the most famous examples of these kinds of reference points messing up happiness. So, some of you folks might remember who this guy is, Michael Phelps. This is Michael Phelps with one of his Brazilian’s of Gold medals that he won and I think this is the 2008, 200 meter swim or something like that. But, he just won the gold medal. He’s pretty happy. You can tell by his expression. And so that’s one point of happiness. But is Michael Phelps a relevant reference point for other people’s happiness. So, let’s look at the dude who is on the side of him, who won the Silver. And ideas we might predict from absolute level, if you win a Silver medal, it’s like you’re pretty happy, right? You just won a medal in the Olympics, but you might be slightly less happy than Michael Phelps, right? So, we might predict that the guy who won the silver expression is happy, but not as happy as Michael Phelps. Well, this is László C, I think, or Cseh, László Cseh. He’s from Budapest. And you can see from his expression his like way less happy than Michael Phelps. He is not looking very happy at all. Much less happy than you might have predicted. Well, if he the Silver winner is that unhappy, what can we predict about the guy who’s the Bronze winner? He must be like super unhappy Iike frowning up there, right? Well, I will reveal the Bronze winner, it’s Ryan Lochte from back in the day, but you can see he is not super super unhappier than the silver medal winner.
He’s actually looking really, really smiley, maybe even more smiley than Michael Phelps, right? So, what is going on? Well, what metric and colleagues claimed is that each of these folks is experiencing a different reference point, when it’s very, very salient to them at the time. If you’re László, and you were like one second away from winning silver, what’s your most salient reference point? You just get the silver medal. You’re thinking. Well, it could have been like spike, one second away from the gold medal. I could’ve win a gold medal and I just messed up, right? That is your salient reference point. And the claim is that that’s why he’s looking pretty unhappy relative to Michael Phelps. If you’re Ryan Lochte, however, and you’re a bronze, what’s your most salient reference point? You’re almost like, “Dude, I almost didn’t make it on here at all.” Like honestly, to get any gold medal, this is pretty sweet. Like if I was fourth or fifth like a couple of half a seconds away, it would have been terrible. And so what Medvec and colleagues did, was they made this prediction, not just from this sort of image here.
They actually went back and analyzed video footage of the Olympics that the year before I think it was. And they had readers just read independently how happy they thought everybody’s faces were at the moment that they got their medal, the moment they knew their place and on the stand. And what they find is exactly this pattern where the white bars is kind of looking at how high happiness is. The white bars are the silver medals and the yellow bars are the bronze guys. And both, when you first find out and when you’re on the stand, you’re finding that the silver medal winners are actually way less happy than the bronze medal winners. Kind of reference points in action. Whatever your counterfactual is, it’s affecting your happiness. It’s not your absolute level or the absolute medal you got, it’s what you think you could have gotten, right? So, that’s all well and good for happiness move that, you know many of us, maybe some Yallies actually are Olympic medal winners in this room. But like most of us aren’t going to get to that point, right? Most of us are not going to have reference points that are that salient like the gold medal in the 200 meter in the Olympics. Are our reference points messing us up in just the same way? And what I’m going to submit to you, is that all the stuff we talked about last time. Good job. How much money you got. The perfect body all those things. We think of, in terms of reference points. In terms of thinking about what counts as a good job, we saw last time that most of our evaluation of what a good job is, actually concerns having a high salary that’s for better or for worse, everybody seems to care about.
And what we’ve seen is that those are cases where we can look at our preferences, only relative to other reference points and other reference points severely seemed to mess this up. One of the first reference points we saw a little bit last time, we’ll talk about in detail that seemed to mess this up, is our own reference point. It’s what was happening to us in the past or what’s happening to us right now. What we used to make in terms of our salary is a pretty salient reference point. We saw that in Ted before when you asked folks, how much salary do you need? What’s the salary that you get your required income that would make you happy? And it just goes up depending on what you were making before. So, if you’re making $30,000, and you’re thinking about your next raise, you say, “Well, the required income I would need to be happy is 50K.” Whereas if you’re at a $100,000, and you’re thinking about your required income you then say, “Aha, actually it’s not like 50K. That’s not. It’s not like twice as good as I should have been. What I really need is 250 K.” Now, you’re kind of constantly bumping yourself up. And this, is this idea that our idea of a good income is not just done in absolute terms. It’s done relative to some reference point. And the reference point is often what we use to make a little bit ago, or what we’re making right now, that we kind of never get satisfied. And two economists did a nice analysis of this kind of what’s the jumping point, and what they find is for every amount that your actual income goes up a dollar, your required income, the income you think you want, actually goes up a dollar and 40. And this happens every raise. Every raised point if I survey you, actually think you’re not making enough, you want to make more. So, this is one of the first reference points that super messes us up, is our own current status is messing up what we think the good status is. We’re constantly below the reference point we see. The more annoying reference point, and the one that I think messes us up even more in all these other different contexts, is not our own reference point where we are right now, or where we were before. It’s the reference point of where other people are at. It’s our social comparisons. And I’ll put this kind of slightly cheesy cartoon up there, and you can’t read it in the back. This is guy kind of negotiating for a salary raise and he says, “Okay. If you can’t see your way to giving me a pay raise, how about giving Parkinson a pay cut?” And the idea is like this guy is going to be able to buy any more of Parkinson earns less than him. But that is a salient thing to us. We care a lot about where we stand relative to other people, even more than our own absolute level. This is what psychologists refer to as social comparison. As you might guess this is the act of evaluating yourself be it. Whatever it is, if it’s salary, possessions, abilities, beauty, and grades, whatever relative to other people. Okay. Let’s back up there. Good. And so is this really the case? Are we constantly comparing against other people? Well, it turns out that comparisons against other people are one of the number one things that affects whether or not we not only like our salary but also like our job. This is what Clark and Oswald looked at. They actually did a big survey of 5,000 British workers at various jobs and what they found was that a person’s job satisfaction, how much they liked their job, actually went down as their comparative income went up. In other words, as your income is less than the other people in your firm, if you feel like you’re making less, you like your job actually less. So as other people’s income goes up, you like your job even less. And so the idea is if you’re in a place where your co-workers have a higher salary than you, you’re just necessarily less happy with your job. Controlling for absolute income, so controlling for how much you make, you’re still just less happy not because somebody else makes more than you. Even though that doesn’t affect how much earnings you take home, what kind of house you can buy, what kind of car you can buy. None of that’s affected, but it still makes you unhappy. In fact, it makes you so unhappy, that humans do what they tend to do when they’re unhappy which is do all these crazy spiteful things like maybe take less money to make other people get less money, too. And so this is what Solnick and Hemenway looked at. They actually did this survey among Harvard students at the Harvard School of Public Health. They asked, “Okay, imagine you were to pick a job with one of two situations. Which would you prefer? So option number one is that you can have a job where you earn $50,000, but everyone else in your firm at your same level is only earning $25K or you could be in a job where you are actually earning $100,000, but everyone else around you in your similar pay grade is actually earning $250,000 dollars?” You would think that most people would want double the potential income that they could spend like more cars, more all the stuff we think we want. But, in fact, when you actually look, over 50% of people choose the first one. Over 50% of people choose having half of the income so they won’t be less than others, which is pretty crazy. This also explains some of the reasons why earning less than others causes so much hardship. So think of the case of unemployment rate, something you might want to bring up. What’s the awful thing about being unemployed? You might think it’s like not having a job, not having money, and so on, but it’s probably maybe just earning less than others in a really extreme way. And to look at whether or not that was the case, Clark did this cool study and made a kind of funny prediction. He predicted, basically, that if you are unemployed in an area where not that many people are unemployed, that’s going to impact you really badly. But if you’re unemployed in a spot where lots of other people are unemployed, you’re going to be fine, even if that means the overall job rate around you is like really, really bad. And so to test this, he looked at this measure of well-being, comparing people who were employed versus unemployed, so it’s like how much worse are you than if you had a job, across different cities in the UK with different unemployment rates. And so here’s what I’m going to plot. This is kind of how big the well-being gap is. So bigger numbers means you’re like worse off when you’re unemployed than when you’re employed. And this is the unemployment rate of these different counties in the UK. And so bigger numbers means more unemployment. And here’s what they find. They’re just plotting all the different kind of ZIP codes throughout the UK, and what you’re seeing is this negative relationship. So if you’re unemployed in a spot where lots of other people are unemployed, it’s actually not as bad for you even though it means that all the people around you are not having the income they might expect. We’re so prone to social comparisons that even something like not having a job, depends on whether that is bad for us, it depends on whether or not other people around us don’t have that, too. And so this gets even more extreme when we think about what counts as a reasonable social comparison. Maybe it makes sense that if you’re unemployed, you treat others who are employed or in your ZIP code as being a reasonable social comparison. But are we only doing that or are we taking in these reference points that are kind of crazy? What’s my reference point for what my salary should be as a Yale professor? I could look to Paul Bloom, who’s my colleague, who also teaches Coursera courses. He’s in the psychology department. He might be a good reference point. That might be okay for me to compare myself to, but it would be bad if I was comparing my salary against Beyoncé’s because that’s just crazy. I’m not going to be Beyoncé. I’m not going to make her money. I’m not going to be as beautiful as her. So we would assume that our minds, if they’re going to use reference points, use reasonable ones. But it turns out that our minds don’t do that. They seem to soak in anything around us as a reference point. And given that I’m watching Beyoncé videos, this could be messing me up. And so this is what O’Guinn and Schrum looked at. They wanted to see whether people who were exposed to crazier and crazier reference points, more unrealistic standards of salaries and incomes, actually got messed up. And here was their hypothesis. People who watched lots of TV are faced with people with crazy salaries, crazy incomes, crazy beauty levels, crazy stuff. Is that messing people up? In other words, just watching a lot of TV where you see things like the Real Housewives and Empire and all this stuff, does that make you less satisfied with your own salary? Does that mess up your intuitions about what normal salaries around you are? And what they found was that in fact, it does. So as you go up in your TV watchings, this is number of hours of TV watching, you also go up in your estimation of other people’s average wealth. So this isn’t just like average wealth that you see on TV. This is average wealth around you. In addition, what they found is that if you go up in numbers of hours a TV watching, you also go down in your estimate of your own wealth relative to others. So the more TV you watch, the more unhappy you are with your own income. Why? Presumably because you see these Real Housewives, right? You’re watching like Kim Kardashian on her reality TV show and you’re like, “My income is not nearly this good.” And what do you do to solve it? You might just be unhappy. You might try to spend more to keep up with the Joneses. And that was what Schor looked at and did because the economists can do these kind of cool calculations. And what was reported is that for each hour of extra TV watching you do a week, you are spending on average $4 more each week in household spending. So for every hour of TV you watch, people are spending $4 more on stuff. Why? Presumably because we have these mechanisms to kind of keep up with the Joneses. We’re trying to kind of keep up with the other folks who are near us, but we’re not calculating who’s really a good reference point to be in near. We’re just kind of keeping up with whoever happens to be in our space, be it people we see on Facebook, people we see on TV, people we see. So we’re not calculating the weirdness of how people got the stuff that they got. And another lovely example of this, one of my favorite kind of studies in this field, comes from Kuhn and colleagues, who looked at a strange case of Keeping Up with the Joneses, namely “Do you try to keep up with people in your neighborhood who have won the lottery?” And they looked at a particular lottery in the Netherlands where you win not only a bunch of money, but you also win a car. And so you have this prominent new car that’s sitting in your garage. And the question is, “If you live close to somebody with that new awesome car in their garage, does that mess with you? Does that cause you to want to buy your own awesome new car even though you didn’t win the lottery and you can’t afford it?” And so here’s what they find. So they’re plotting how the percent of people that are buying new cars within that year, and they’re looking at it whether you live next door to the person who won the lottery, whether you’re two houses away, or whether you’re a control, like you’re in that district but you’re not seeing this new car in the garage all the time. And so here’s what happens before the lottery. Just to say people in these situations don’t like buy cars differently, they kind of all buy cars at a particular rate. And here’s what happens the year after the lottery. Basically, you’re almost twice as likely to buy a new car yourself if you live next to the person who won the lottery than you are if you’re just kind of in a control case. It’s kind of like just seeing the new car in the other person’s lot makes you want it so bad that you buy this car that you probably don’t even need, at least, basically what the controls are doing. And so all this goes to say that all of these things we’re seeing, kind of a good salary, money, how much awesome stuff you have, we don’t think in terms of absolutes, we think in terms of reference points and it’s a really insidious reference point. It’s just like whoever we happen to be near, and whatever lives we happen to see, and if we’re in a situation where we’re seeing lives that are just like crazier than ours, because Kim Kardashian’s life or Beyoncé’s life, or so on, we’re not tracking that. This happens also in the context that you guys face all the time like the context of good grades.
Why are Yale students so unhappy about their grades? Because they happen to be at a place where lots of people are really smart and lots of people get really good grades. But that means that as other people’s grades go up, maybe your unhappiness with your own grades are going down and that can also lead to these insidious, spiteful sorts of behaviors, vis-a-vis other people’s grades. And one of my favorite examples of this comes from a cool study by Burleigh and Meegan, where they actually did an experiment in their own classes to see how spiteful students might be about other people’s grades. And so I’m going to show you the email they sent out. I’ll kind of read you the relevant part so you don’t have to read it.
But he says, “Look, you know, I like to give my students these bonus opportunities. You know, sometimes I make mistakes. And so here is the bonus opportunity I’m going to give. Basically, if you just check this answer at the bottom, anyone who does this, we’re going to have a system where you’re going to get.567% on your final grade.” So your final grade point average is going to go up by a half a point, basically, which sounds awesome, which if you’re on the tipping point, if you’re like a 95.5, or, I guess, maybe say like a 90.5, maybe that will tip you into a better grade. So you could go from like a A minus to an A, right? So seems pretty sweet. All you had to do is check this off. But he goes on to say because it’s 0.5, not everybody is going to get the benefit of this, right? So he says, “If you’re at 69.0 and you go to 69.5, you know we round up, so that’s going to be pretty sweet for you. Then you’ll go from a 69 to a 70. Instead of getting a D plus, you’re going to get a C minus. You’re going to go up a lot. But, if you happen to be a 68.9 and I add the 0.5, then you’re only at 69.4.”
Say like you wouldn’t go up. So are you getting the math? It just depends where you happen to fall on that decimal if you go up a grade or not. And he says, “Look there is no way to know what part of the decimal you fall on. Probably half of you are going to be lucky and you’re going to go up a whole letter grade and the other half of you are not. But there’s no way to know. You just like have a 50% chance.” And the question is do you approve? Does the class as a whole approve of this policy, right? And so just to point out, nobody is going to go down at all and everybody doesn’t know they have a half chance of going up just because they’re on the cusp. What they found is that not everybody preferred this plan. In fact, about 41% of students rejected the proposal to do this and said, “We don’t want our class to be able to do this.” Even though nobody goes down and everybody has a half chance of going up, a lot of people rejected it. And the neat thing is that the rejections were higher in the top 50% of the class. In fact, they were about 10% higher than across the board. What does this mean? This means that the students who were at the highest levels of the class, who had the most worries about social comparisons of people being bumped up, they were the ones that hated it the most. And the upshot is that students are all willing to miss out on their own grade bonus just to kind of screw over other people because of this social comparison. Some of you are kind of sad. Some of you are laughing, but I think you get that Yale students might do something similar.
So good grades, social comparison, really bad. How about things like perfect body, perfect relationship, and so on? Well, this is a spot that super insidious if you’ve ever been like me at an airport or at a newsstand looking at all these things, because the world has media that features bodies and perceptions that don’t match with what the average is, and at least in my case, they’re usually a little bit hotter than me. I’m constantly faced with these social comparisons that are younger, better, all these things. And so the question is, does this really mess us up? Well, this is why Kenrick and colleagues looked at. They looked at specifically about messing up our happiness, and our mood, and so they did this in particular with women’s mood on this 4-Point Scale, just rate your mood before and after you look at pictures of models in magazines on a 4-Point Scale. And what do you find is that before looking at models, you get about a 2.3 on a 4-point happiness scale. Afterwards, that drops down to about 2.0. But this is on a 4-point scale, all right?
You’re dropping like a third of a point on a pretty small scale. This is just like a few minutes of looking at these kinds of pictures makes you more unhappy. This is true of your own perceptions of yourself. But can this also mess up things like your perceptions of other people around you? Like if you’re in a relationship, and you’re looking at pictures of lots of other hot people who might happen to be hotter than your spouse, do that mess up your own absolute rating of your spouse? Kenrick, in a different paper, looked at this, too. And so, he had men rate their wives attractiveness after looking at centerfold models. You might think oh this is harming anything. I’m just looking at pictures of attractive people, and so on. But in fact, it harmed people’s ratings pretty pretty badly. So, rating your partner in a control condition on this scale came about the rating of 26 when you do after looking at the model, it drops a bunch of points. So, these are small differences but showing you that social comparisons are kind of messing us up.
And if you’re tracking, It’s messing of all the stuff we talked about. It makes you less satisfied with your job your amount of money, your car, your stuff, your relationship, and how attractive your partner is your body, and your grades. All these things other people’s stuff makes you more unhappy. And so, the upshot of that is that, we face a particular set of reference points that are messing us up but you guys in this generation face a very special set of reference points. That have never been experienced in the history of the world. Because you guys don’t just have TV, and magazines, and media, you have the reference points that you face through social media. Through things like Facebook and Snapchat, and all this stuff. And there’s this question about whether or not these kinds of reference points are messing us up to move. Let’s see if that comes back that. Here we go. And so, are these kinds of things also messing you up. And in fact, you might guess they really are. And they really are in a much stronger way than I expected. Before I start looking at this stuff. So, one study, Vogel and colleagues, actually looked at Facebook, and how much looking at your social comparisons on Facebook improve or messes up your own self-esteem. And so, they tested this correlation between Facebook use, and yourself rated self-esteem after you’ve looked at Facebook. And they also looked at the direction of your comparison. So, when you’re on Facebook, and when you’re on Snapchat, are you looking to see, are other people like having a really bad day? Are you trying to make down social comparisons looking at people who are worse than you? Or you on Snapchat like everybody else’s Saturday night is way better than mine and kind of looking up and making these upward social comparisons, what happens? Well, what they found is that there’s a pretty high correlation between Facebook youth and self-esteem. So, two things. Remember last time, we talked about size of correlation. And we saw that the correlation between income and happiness is at about point one. There is twice as big a correlation between Facebook use and self-esteem. But unlike the other correlation, this correlation is in the negative direction. What does that mean? It means the more Facebook use you have, the lower your self-esteem, and the magnitude of this effect.
Again, soak that in, is twice as much as the magnitude of increased income on happiness, right? This is messing you guys up pretty badly. You could say, though, “Well, correlation doesn’t necessarily mean causation. Maybe it’s the low self-esteem people who are spending all this time on Facebook, right?” So, could we do an experimental intervention where we make people look at Facebook feeds just random people and see if that messes them up. And that’s what they did. And a second study, they kind of expose people to this face fake Facebook feed. So, they can mess with it and say, “Are they all the awesome people? Or are they kind of losers people who don’t have things going on?” And so, they did both they did the kind of people who are awesome, and people who were loser-ish and they measured your self-esteem. But they also did a neat thing where they took your ratings of yourself and the target they measured how you thought about yourself after you saw this, and how you thought about the other person. And so, here’s what they find. First is that if you’re making downward comparisons, you’re looking at the losery people, you’re self-rated self-esteem is about that which actually they didn’t do a control sadly. So, can’t say, did it go up or did it go down. But definitely, it’s much lower than if you’re doing this upward comparison. And remember, this self-esteem is like and I think when I said a 5-point scale. This is like a big jump that you’re jumping down just by doing these upward comparisons. What about your ratings of yourself and other people? Well, here are plotting these big ratings. More things are like more also like you think the other person is extremely awesome all these good things. And so, here, are what the data show these white bars are yourself, when you’re making upward and downward comparisons. You get a little bump when you’re making dour comparisons but not very much.
What you do though is get a big bump depending on what you’re looking at with the target. So, when you’re making upward social comparisons, you definitely think that target is better than you. But when you’re making downward social comparisons the weird thing is you don’t get that same bump for yourself. So, if you’re looking at the loser people, you might think you kind of bump up your own perception of yourself. You don’t. The only thing you get is a bad effect when you’re looking upward. You think I’m such a loser like this is terrible and so on. Upshot is that all the data suggests that across social media, all these problems with reference points are kicking in, and they’re kicking in in a major way, and in a way that’s not giving you the benefit that you think it’s actually just bad. So, if you right now are to structure your life and do one thing that you think would make you happy, it wouldn’t be picking a job that earns you a $100,000. Because the magnitude of that effect is less than if you just decided to stay off social media because it’s not actually helping you. And so, with that, we’ll kind of conclude this section this annoying feature that our mind does anything in terms of absolute, it thinks relative to reference points. And our mind to just sucks at picking reference points. It just soaks in whatever reference point we get, and it doesn’t actually have a great filter. And so, the more you can kind of force that filter on it, the better you will be.