If there's one thing that happiness research makes clear it is that commuting makes us miserable. This story in the Washington Post makes the “affective ignorance” literature plausible. Check this:
Ockershausen reported the conditions from the scene last night and said he wasn't moving. “It's gridlocked all the way across the bridge,” he said, speaking on his cell phone. “I guess I'll listen to the radio. It's the only choice I have.”
He awakes at 4 a.m. to come to work and often waits until after 7 p.m. to leave so he can miss the heaviest traffic. His 48-mile commute typically takes two hours or more, and he gets home so late, he usually heads straight to bed.
That makes no sense to me. Why would he do that to himself? There may be a good reason. But it is very possible that there is no good reason. If I was this guy, I would be willing to accept a 100% increase in housing costs to reduce my commute to 10 minutes, or a 50% pay cut to work 10 minutes from where I already live. This wouldn't only buy him about a month a year of time to do things more meaningful than sitting in a car, but would diminish his stress level magnificently.
My sense is that commuting nightmares are often a function of two earner families. They make a mistake and think of a huge metropolitan area as a single “place” and one takes a job in Gaithersburg and one takes a job in Alexandria. Maybe they live in Gaithersburg and mom has a 10 minute commute. But it takes dad two hours during rush to get to Alexandria. Isn't it just bizaree that people do this. In Iowa, for example, practically no one lives in Cedar Rapids and drives to Des Moines every day. Because that would be crazy. But people from Gaithersburg are willing to drive two hours to Alexandria because, why? It's the same sprawling metro area? The Washington Post classifieds make it look like a single labor market? No doubt this is sometimes worth it, but my guess is that a lot of people are just being imprudent.
My ideal commute is about zero minutes. I think my optimal happiness balance would have me work from home in a quiet, rural location (the studies are unequivocal in showing country as less anxiety inducing than town — and, anyway, I am not at heart city folk) and then, maybe once every other month, spend a week in Washington DC or New York City or some such place maintaining a high-status instititutional affiliation and high social capital urban social network. And then I could go back home to the quiet and the dogs and the good warm people of Meadow Junction (with a sack of gourmet groceries from the city). This is, of course, the sort of thing you need some money to do. (House in the country, apartment in the city…)
And that's precisely how money makes you happy: by financing an otherwise infeasible happiness-producing lifestyle. You know, I would also get a personal trainer who would ensure that I excercised more, and take more Yoga classes, if I could afford them. And this would very likely give me a happiness bump, too. Of course, money per se doesn't do much for you (except insofar as simply having money produces a sense of higher status), and you can spend it in ways that will make you miserable. But not having more money certainly rules out doing more stuff that could make you happier. Its the consumption pattern that matters. If the better patterns are available with more money, then money matters.
Do you think your hedonically optimal consumption pattern is available to you at your current income? If you think not, what do you think the probability is that you are wrong? (Keep in mind, the higher your income, the higher the probability that you are wrong!)