Does people’s life satisfaction adapt to material improvements? In a recent paper (gated), Galiani, Gertler and Undurraga find that it does, even in a case of very poor people receiving a really basic service (housing). In a large-scale experiment, some poor households in El Salvador, Mexico and Uruguay were randomly selected to receive a ready-made small house. Receiving such housing increased the share of households reporting to be “satsfied” or “very satisfied” with the quality of their life by around around 40 %, from 0.53 to 0.73, thus confirming that it was something these households really needed. What about the effect in the long term? Eight months later, more than half of the gain had disappeared, highly consistent with the hedonic treadmill hypothesis.
The Incidental Economist reports a study from JAMA Pediatrics in which 120 small kids with “nonspecific acute cough” were randomized between 1) treatment with agave nectar, 2) placebo and 3) no treament. Parents, who were blind to the difference between agave nectar and placebo, answered surveys about the severity of the children’s cough before and after treatment. On almost all measured outcomes, the researchers found improvements for both the treatment and placebo groups compared to the no treament group, but no difference between them. The powerful tool of the placebo effect should be kept in mind by parents.