Gilbert and his collaborator Tim Wilson call the gap between what we predict and what we ultimately experience the ''impact bias'' -- ''impact'' meaning the errors we make in estimating both the intensity and duration of our emotions and ''bias'' our tendency to err. The phrase characterizes how we experience the dimming excitement over not just a BMW but also over any object or event that we presume will make us happy. Would a 20 percent raise or winning the lottery result in a contented life? You may predict it will, but almost surely it won't turn out that way. And a new plasma television? You may have high hopes, but the impact bias suggests that it will almost certainly be less cool, and in a shorter time, than you imagine. Worse, Gilbert has noted that these mistakes of expectation can lead directly to mistakes in choosing what we think will give us pleasure.
We may be poor at making personal choices, but there is a political component to happiness. Cross-cultural studies have shown that having money is not sufficient for well-being. One of them is at Cross-National Differences in Happiness (pdf).
...Happiness tends to be higher the better the country provides its citizens with material comfort, social security, education, health care, and political rights. Happiness is also higher in the relatively equal societies. These differences are not only a manifestation of wealth. After control for RGDP the correlations remain sizeable. Together these country characteristics explain 80% of the variance in (average) happiness in the 28-nation set.
The Netherlands is a happy place, despite the weather. Happiness correlates with longer life, in their study, and is inversely correlated with "anxiety" measures like alcoholism, suicide, mental distress... It seems that happiness is a measurable trait that can be improved, perhaps more at the political and social level than by action at the individual level?