I am happy to see that Dan Ariely still has his biweekly column in the Wall Street Journal, so I guess no fallout yet from the issues I had written about before.
Even better from my perspective, this week’s column introduced a new psychologic term I had never heard before – the End of History Illusion.
Here is the email Dan received:
My husband and I just bought a house, and we are considering renovating it to make it our dream home. We discussed our plans with a contractor, who mentioned that some of the renovations weren’t good for resale. Given how long we plan to live there, should this really be a consideration for us? –Jeannie
And here is Dan’s response:
Before even thinking about the preferences of a future buyer, consider the possibility that your own preferences and lifestyle could (and likely will) change over time. The features of your dream house today might end up becoming your worst nightmare in the future (just ask people with outdoor pools).
People underestimate how much they will change in the future. We tend to think that right now, at this present moment, we have become the person we will be for the rest of our lives. This phenomenon is referred to as the “end of history illusion” and was demonstrated in a survey asking more than 19,000 people ages 18 to 68 how much their personalities and preferences for things like music and travel had changed in the past decade, and how much change they predicted for the next decade. People of all ages said that they had changed a lot over the last ten years, but that they didn’t expect to change much moving forward.
This illusion can lead people to overpay for future indulgences based on current preferences. In one example, people were not willing to pay much to see a band that they liked a lot 10 years ago, but they were willing to pay a lot to see the band that they like right now in 10 years.
Perhaps you and your husband should consider making this house your dream home over time, as your dreams change: Start with a few small projects instead of a complete remodel, and leave ample room to adjust for your evolving preferences and tastes.
It’s an interesting concept, but I have trouble applying it to myself.
Unlike the people in the study who say they have changed a lot in the past 10 years, I don’t think I have.
On the other hand, with retirement on the horizon, I am guessing that will lead to some significant changes over the next 10 years. I guess I do not think I have become the person I will be for the rest of my life.
I just hope that I don’t have some sort of illusion of the future (a term I just made up, and copyrighted on the spot), thinking I will change a lot in the future, but I don’t.
I don’t want to be talking about accounting and checking my WP stats every three minutes.for the next 10 years (and no one else does either).
So please, bring on the illusion of the past…
*image from Ideas Ranking