On listening, Kahneman's stuff is even better than I thought, and I was already rather effusive in my praise.
It isn't just about happiness. Experience vs. remembering are wholly different (correlation = 0.5), and it applies everywhere, even though he doesn't say it in his talk. Most interesting is how well this explains stuff like human time preference lack of invariance:
In a choice between 1 hedon now(t=0), and 2 hedons in a week (t=1), people are inclined towards 1 hedon now. In a choice between 1 hedon in a year (t=52), and 2 hedons in a year and a week (t=53), no one chooses the 1 hedon. Explanation: Experiential vs. remembering self....
Also fascinating....experienced happiness scales to about $60K annual. Remembered happiness is unbounded.
The massive disconnect between memory of what happened, and what you experienced when it happened (as captured by journal, for instance)...a major portion of the human self-deception is now concretized.
Also leads me to take Bishop Berkeley much more seriously.
To a significant extent....Hume is right...your memory is measureably false in most cases. We hope it's not so bad that the sun didn't actually come up yesterday, but it's awful close.
Your memory of your experience is only barely related to your experience. How much does this change education theory? How much does it change the goal of education? How much does this explain conservativism's pining for the "Golden Age" of some time ago? How much of what we thought we should change, we shouldn't.