Risk Realization, Emotion, and Policy Making

People are likely to overestimate the impact of negative life events on our enduring sense of well-being. If true, this empirical finding puts policy makers in an awkward position because they are generally called upon to make policy in anticipation of , rather than in response to, such events. Nonetheless, I will argue that policy makers should take into account our tendency to overestimate the emotional impact of such events.