IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Happiness, freedom and control

  • Verme, Paolo

How do people value freedom of choice? Drawing on economics and psychology the paper provides an hypothesis and empirical evidence on how individuals may value freedom of choice and derive utility from it. It is argued that the degree of perceived control that individuals have over choice - a construct known as the locus of control in psychology - regulates how we value freedom of choice. People who believe that the outcome of their actions depends on internal factors such as effort and skills (the 'internals') have a greater appreciation of freedom of choice than people who believe that the outcome of their actions depends on external factors such as fate or destiny (the 'externals'). We find some evidence in support of this hypothesis using a combination of all rounds of the World and European Values Surveys. A variable that measures freedom of choice and the locus of control is found to predict life satisfaction better than any other known factor such as health, employment, income, marriage or religion, across countries and within countries. We show that this variable is not a proxy of happiness and measures well both freedom of choice and the locus of control. 'Internals' are found to appreciate freedom of choice more than 'externals' and to be happier. These findings have important implications for individual utility, social welfare and public policies.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 71 (2009)
Issue (Month): 2 (August)
Pages: 146-161

in new window

Handle: RePEc:eee:jeborg:v:71:y:2009:i:2:p:146-161
Contact details of provider: Web page:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. James Heckman, 2000. "Policies to Foster Human Capital," Working Papers 0028, Harris School of Public Policy Studies, University of Chicago.
  2. Di Tella, Rafael & Alesina, Alberto & MacCulloch, Robert, 2004. "Inequality and Happiness: Are Europeans and Americans Different?," Scholarly Articles 4553007, Harvard University Department of Economics.
  3. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  4. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
  5. Alberto Alesina & Nicola Fuchs-Sch√ľndeln, 2007. "Goodbye Lenin (or Not?): The Effect of Communism on People," American Economic Review, American Economic Association, vol. 97(4), pages 1507-1528, September.
  6. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
  7. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
  8. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July.
  9. Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
  10. Kahneman, Daniel & Wakker, Peter P & Sarin, Rakesh, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 375-405, May.
  11. Melissa Osborne & Herbert Gintis & Samuel Bowles, 2001. "The Determinants of Earnings: A Behavioral Approach," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1137-1176, December.
  12. Ravallion, Martin & Lokshin, Michael, 2000. "Identifying welfare effects from subjective questions," Policy Research Working Paper Series 2301, The World Bank.
  13. Heidi Lepper, 1998. "Use of Other-Reports to Validate Subjective Well-Being Measures," Social Indicators Research, Springer, vol. 44(3), pages 367-379, July.
  14. Blanchflower, D.G. & Oswald, A.J., 1997. "A Study of Labour Markets and Youth Unemployment in Eastern Europe," The Warwick Economics Research Paper Series (TWERPS) 499, University of Warwick, Department of Economics.
  15. Ruut Veenhoven, 1996. "Developments in satisfaction-research," Social Indicators Research, Springer, vol. 37(1), pages 1-46, January.
  16. Sebastiano Bavetta, 2004. "Measuring freedom of choice: An alternative view of a recent literature," Social Choice and Welfare, Springer, vol. 22(1), pages 29-48, 02.
  17. Michael Fordyce, 1988. "A review of research on the happiness measures: A sixty second index of happiness and mental health," Social Indicators Research, Springer, vol. 20(4), pages 355-381, August.
  18. Gravel, Nicolas, 1994. "Can a Ranking of Opportunity Sets Attach an Intrinsic Importance to Freedom of Choice?," American Economic Review, American Economic Association, vol. 84(2), pages 454-58, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:71:y:2009:i:2:p:146-161. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.