In one study the question was how happy would you be about eating potato chips. Intuitively, we might think that you will either be happy about eating chips or not.
Two reference points were created: the experimenter placed either chocolate or sardines on the table next to the package of chips.
Turns out the participants enjoyed the chips more when there were sardines on the table and less when they ate them next to chocolate.
The endowment effect
A memory of the past is an essential element of present well-being because memories give us a reference point to define our present happiness.
How memories affect our current sense of well-being is complicated though: they can either be a source of happiness or unhappiness.
The endowment effect refers to when an event directly contributes to one’s happiness: good things will make us happier, while bad things make us unhappier.
Research has also shown that people who endowed or savoured positive past events but didn’t endow or dwell on negative past events, reported greater levels of happiness.