Satisfaction and the Potentially Misleading Power of Counterfactual Reasoning : A Field Study Set Before, During and after the COVID-19 Lockdown

Does imagining what life could have been in the absence of a shock change current satisfaction? To answer this we collect field data through a survey that covers the period before, during and after the COVID-19 lockdown, exploiting the features of a natural experiment combined with induced variation stemming from a randomized control trial (RCT). Our data covers first-year students studying before the COVID-19 pandemic, during the full COVID-19 lockdown period, and during the partial COVID-19 lockdown period. The RCT directs a subset of students to imagine how satisfied they could have been in the absence of COVID-19. The control group are instead asked about their current satisfaction. We find that imagining life in the absence of a shock (COVID-19) can impact current satisfaction: the higher individuals think their satisfaction would have been in the absence of the shock, the lower their current satisfaction. However, the natural experiment component of our study suggests that counterfactual reasoning may mislead. By comparing the satisfaction of COVID-19 students asked to imagine university life without COVID-19, with the reported satisfaction of equivalent students just before the arrival of COVID-19, we show students typically over-exaggerate how satisfied they would have been if a negative shock had not happened