Hedonic adaptation, a concept within Behavioral economics, describes the observed human tendency to return to a relatively stable baseline level of happiness despite significant positive or negative life events or changes52, 53. This phenomenon suggests that while a major life event, such as a substantial financial windfall or a personal tragedy, might temporarily elevate or depress an individual's mood, their subjective well-being tends to revert to a predetermined "set point" over time51.
History and Origin
The concept of hedonic adaptation was formally introduced by psychologists Philip Brickman and Donald Campbell in their seminal 1971 essay, "Hedonic Relativism and Planning the Good Society"48, 49, 50. In their work, Brickman and Campbell proposed that individuals possess an adaptation level, meaning that their emotional responses to new stimuli are judged relative to their past experiences and current circumstances46, 47.
Early research supporting this theory, including a notable 1978 study by Brickman, Coates, and Janoff-Bulman, compared the happiness levels of lottery winners and accident victims45. Surprisingly, their findings indicated that neither group experienced a permanent shift in their long-term happiness, with both tending to return to their baseline levels after an initial period of elation or distress43, 44. The term "hedonic treadmill" was later coined by British psychologist Michael Eysenck in the 1990s to vividly illustrate this ongoing cycle where individuals strive for happiness but remain in the same emotional "place" as they adapt to new circumstances42.
Key Takeaways
- Hedonic adaptation is the process by which individuals revert to a stable baseline of happiness after life-altering events.41
- It suggests that both positive and negative emotional impacts of events are often temporary.39, 40
- This phenomenon can influence Consumer behavior and financial Decision-making, as initial joy from purchases or windfalls fades.38
- Understanding hedonic adaptation can help in setting realistic Goal setting and fostering long-term Subjective well-being beyond material gains.37
Interpreting Hedonic Adaptation
Hedonic adaptation implies that the intensity of emotional responses to new stimuli diminishes as individuals become accustomed to them35, 36. This means that a significant raise, a new luxury item, or a major life achievement might provide an initial surge of happiness, but this feeling tends to normalize as the new circumstance becomes the "new normal"34.
For example, someone might initially experience great satisfaction from a substantial increase in income, but over time, their expectations and desires may rise in tandem, leading to no permanent gain in happiness. This principle is often linked to the concept of Diminishing marginal utility, where the additional satisfaction derived from each successive unit of a good or service decreases33. Understanding this process can inform approaches to Financial planning, encouraging a focus on sustainable contentment rather than continuous external gratification.32
Hypothetical Example
Consider Sarah, who has diligently worked for years and finally receives a significant promotion, increasing her annual salary by 30%. Initially, Sarah experiences immense joy and decides to celebrate by purchasing a new, more luxurious car and moving into a larger apartment. For the first few months, the new car brings a thrill to her commute, and her spacious apartment feels like a dream come true.
However, after about six months, Sarah notices that the excitement from her new possessions has begun to wane. The once-thrilling car now feels like her ordinary mode of transport, and the larger apartment, while comfortable, no longer provides the same sense of novelty or elevated happiness. Her daily happiness level has gradually returned to where it was before the promotion. This illustrates hedonic adaptation in action; the positive financial event led to a temporary boost in her happiness, but she adapted to her new circumstances, and her emotional baseline recalibrated. This can lead to Lifestyle inflation if not managed consciously.
Practical Applications
Hedonic adaptation has several practical applications, particularly within personal Wealth management and investment psychology. Recognizing this phenomenon can help individuals make more informed financial choices that align with long-term well-being rather than chasing fleeting pleasures31.
- Spending Habits: It encourages a shift from constantly pursuing material possessions for happiness to prioritizing experiences, which research suggests may provide more lasting satisfaction because they are less susceptible to rapid adaptation30. Experiences create memories and often foster social connections, which can have a more enduring impact on happiness. As highlighted by research discussed by Cornell University, spending on experiences rather than material items tends to bring more happiness.29
- Financial Goals: Understanding hedonic adaptation helps individuals set more realistic Savings goals and manage expectations regarding the emotional impact of financial milestones. It suggests that a continuous increase in income may not lead to a perpetually increasing level of happiness28. This can influence strategies for achieving Financial independence, focusing on security and purposeful spending over endless accumulation.
- Investment Psychology: In Investment psychology, awareness of hedonic adaptation can mitigate the pursuit of ever-higher returns for emotional satisfaction. Investors might adapt to higher portfolio values, leading them to take on excessive Risk tolerance in pursuit of the next "high." The Federal Reserve also explores the nuanced relationship between money and happiness, recognizing that financial gains alone do not guarantee sustained well-being.27
Limitations and Criticisms
While widely recognized, the theory of hedonic adaptation has faced some criticisms and proposed revisions. One key area of debate is whether individuals always return to a neutral set point or if their baseline happiness can genuinely shift over time25, 26. Some research suggests that significant life events, particularly severe negative ones like chronic illness or unemployment, may lead to long-lasting changes in an individual's happiness baseline, rather than a full return to the previous level23, 24.
Furthermore, the original theory did not fully account for individual differences in adaptation21, 22. Not everyone adapts at the same rate or to the same extent, and factors such as personality traits, coping mechanisms, and the type of event can influence the degree of adaptation19, 20. For instance, a University of California, Riverside, study suggests that while financial gains may not provide perpetual happiness, certain levels of income can significantly impact daily emotional well-being and reduce stress, indicating that adaptation is not always complete.18 This challenges the notion that efforts to increase societal or individual happiness are entirely futile, suggesting that while adaptation is powerful, it is not an insurmountable barrier to improving long-term well-being.17
Hedonic Adaptation vs. Hedonic Treadmill
The terms "hedonic adaptation" and "hedonic treadmill" are often used interchangeably, but they represent slightly different aspects of the same psychological phenomenon16.
| Feature | Hedonic Adaptation | Hedonic Treadmill |
|---|---|---|
| Concept | The psychological process of adjusting to new stimuli and returning to an emotional baseline.15 | A metaphor describing the overall phenomenon of striving for happiness but remaining at a stable level, like running on a treadmill.13, 14 |
| Focus | The internal mechanisms by which emotional responses diminish over time. | The cyclical, often frustrating, experience of happiness returning to a baseline despite external changes.12 |
| Implication | Explains how people adjust to both positive and negative events.11 | Highlights the result of this adaptation: the continuous pursuit of new sources of happiness as old ones fade.10 |
While hedonic adaptation is the underlying psychological process, the hedonic treadmill metaphor vividly illustrates the common human experience of perpetually seeking new sources of pleasure or contentment, only to find that the resulting happiness is temporary8, 9. Understanding the distinction can help in recognizing the mechanisms behind our emotional responses to financial gains and losses.
FAQs
What does "hedonic" mean?
"Hedonic" refers to anything related to pleasure or the pursuit of pleasure. In the context of hedonic adaptation, it relates to an individual's emotional state and levels of happiness or satisfaction.6, 7
Does hedonic adaptation mean I can't be happier?
No. While hedonic adaptation suggests a tendency to return to a baseline, it doesn't mean permanent happiness is impossible. Understanding this process can help in actively seeking activities and experiences that are more resistant to adaptation, such as fostering strong relationships, engaging in meaningful work, or practicing gratitude.4, 5 Such deliberate actions can contribute to a higher sustained level of Subjective well-being.
How does hedonic adaptation relate to money?
Hedonic adaptation explains why increases in income or material possessions often provide only temporary boosts in happiness. People tend to adjust their Spending habits and expectations to their new financial status, leading to a return to their previous level of contentment2, 3. This highlights the importance of using money intentionally, perhaps by investing in experiences or saving for long-term security, rather than just accumulating possessions.
Can hedonic adaptation be positive?
Yes, hedonic adaptation can be beneficial. It allows individuals to recover from negative life events, helping them to adjust and regain emotional equilibrium after setbacks1. This resilience is a crucial aspect of human Decision-making and coping.