Subjective Well-Being and Utility
Friday, Jan. 6, 2017 8:00 AM – 10:00 AM
Hyatt Regency Chicago, Michigan 2
- Chair: Marc Fleurbaey, Princeton University
Do People Seek to Maximize Their Subjective Well-Being –and Fail?
AbstractIn a new survey we directly elicit if respondents seek to maximize their subjective well-being (SWB). Specifically, after a standard SWB question, we ask if they can think of changes in their lives that would improve their SWB score. If the SWB score is just one argument among others in the respondents’ goals in life, they should easily find ways to improve it, at the expense of other dimensions they care about. Our results suggest that close to 90% of the respondents actually seek to maximize their SWB. The life satisfaction question appears the best contender as the “maximand” in the contest, before the ladder-of-life question and felt happiness. Among the other goals that people pursue and for which they are willing to sacrifice some of their SWB, the prominent appear to be about their relatives and about their future self. A “paradox of happiness” appears: the maximizers have less SWB than those who pursue other goals.
Would You Choose to Be Happy? Tradeoffs Between Happiness and the Other Dimensions of Life in a Large Population Survey.
AbstractA large literature documents the determinants of happiness. But is happiness all that people want from life; and if so, what type of happiness matters to them? Or are they willing to sacrifice happiness (however it is defined) for other attributes in their lives? We ask a large sample of UK and US individuals to choose between and judge lives trading-off types and levels of happiness with levels of income, physical health, family, career success, or education. We find that people on average prefer experiential happiness as compared to the evaluative and eudaimonic components, but not at the expense of health. Preferences also vary with the non-happiness good, type of happiness (life satisfaction, affect, purpose), and the respondent’s own happiness and non-happiness attributes. We discuss policy and methodological implications of these findings.
Experienced versus Decision Utility: Large-Scale Comparison for Labor Supply Decisions
Abstract: Interpreted as "experienced utility", Subjective well-being (SWB) has been compared to "decision utility" using specific experiments based on stated preferences. We suggest here an original large-scale comparison of ordinal preferences elicited from either SWB data or revealed preferences. We focus on income-leisure preferences, closely associated to redistributive policies. Precisely, we compare indifference curves consistent with subjective satisfaction to those derived from actual labor supply choices, on the same panel of British households. The results show striking similarities, whereby indifference curves overlap on average. Consistently, we find that a majority of individuals make decisions that are not inconsistent with SWB maximization. Differences between the two welfare measures arise for particular subgroups, lending themselves to intuitive explanation. We investigate some of the potential factors that can distort the optimization process (constraints, `focusing illusion', aspirations) and draw implications for policy evaluation.
University of Michigan
- D6 - Welfare Economics