A second explanation is based on the hypothesis of “hedonic adaptation” which maintains that individuals quickly adapt to new circumstances so that, after enjoying higher consumption and income levels, they return to their initial state of satisfaction (or dissatisfaction?).
Think, for example an individual who wins the lottery. He goes crazy, jumps, calls all his friends, makes a big party... Shortly after he gets used to his new standard of living, moving house, has other friends and can have parties every week. What he previously only dreamed is now a reality. But with time he gets used to it. Everything returns to normal and nothing is special, so that now he is fascinated less by that lifestyle and even it comes to seem to him more and more boring. Think too in the children of this “lucky” man who, given his level of wealth, can afford to satisfy every whim of them. His little son constantly requests a sophisticated toy which he has seen on TV and his daughter, one fashion jean. The father buys on Christmas Day and the children are happy at the time, but for New Year they forgot these gifts.
The satisfaction threshold
In third instance is the proposal based on the threshold of satisfaction or “comfort line”. According to it once the individual reaches a certain level of income or consumption no longer increases his happiness. In economic terms, in so far as his income and consumption tend to level of comfort, the marginal utility he gets from them tends to zero.
Could be said that this is a particular application of the “paradox of value” raised by Adam Smith, being that the marginal utility of consuming one more unit of good in a situation of opulence is almost null. And that is when our level of income increases we tend to consume increasingly superfluous goods which do not really need and, to get used to that lifestyle, having those goods is almost indifferent while not having them would be catastrophic for us.
We ourselves can check this if we go and say to a child of the street that we invite him to eat at McDonalls. We will see how his eyes shine with joy. Then we can go and say the same to a child of a prestigious (and expensive) school and he will answer that does not mind because he goes with his dad every week to places like this and much better yet. But the irony is that this same child who rejects our invitation would feel very bad and would make a tremendous tantrum if any week his daddy refused to invite him to some of those places.
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