Location, location, location: the misprediction of satisfaction in housing lotteries.

People tend to overestimate the emotional consequences of future life events, exhibiting an impact bias. The authors replicated the impact bias in a real-life context in which undergraduates were randomly assigned to dormitories (or "houses"). Participants appeared to focus on the wrong factors when imagining their future happiness in the houses. They placed far greater weight on highly variable physical features than on less variable social features in predicting their future happiness in each house, despite accurately recognizing that social features were more important than physical features when asked explicitly about the determinants of happiness. In Experiment 2, we found that this discrepancy emerged in part because participants exhibited an isolation effect, focusing too much on factors that distinguished between houses and not enough on factors that varied only slightly, such as social features.