Affective forecasting

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. 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, 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 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, 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.

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