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Getting used to it: The adaptive global utility model

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  • Bradford, W. David
  • Dolan, Paul

Abstract

This paper expands the standard model of utility maximization to endogenize the ubiquitous phenomenon of adaptation. We assume that total utility is an aggregate function of the utility associated with different domains of life, with relative weights that are optimized according to the effort that the individual expends on producing utility in each domain. Comparative statics from the general maximization problem demonstrate that the traditional Slutsky equation should incorporate an additional response term to account for adaptation processes. Our adaptive global utility maximization model can be used to explain responses to changes in health.

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  • Bradford, W. David & Dolan, Paul, 2010. "Getting used to it: The adaptive global utility model," Journal of Health Economics, Elsevier, vol. 29(6), pages 811-820, December.
    • Handle: RePEc:eee:jhecon:v:29:y:2010:i:6:p:811-820
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    References listed on IDEAS

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    15. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
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    Blog mentions

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    1. The ‘Q’ in the QALY: are we fudging it?
      by Chris Sampson in The Academic Health Economists' Blog on 2013-09-30 10:30:34

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    1. Adler, Matthew D. & Dolan, Paul & Henwood, Amanda & Kavetsos, Georgios, 2022. "“Better the devil you know”: Are stated preferences over health and happiness determined by how healthy and happy people are?," Social Science & Medicine, Elsevier, vol. 303(C).
    2. Dolan, Paul & Kavetsos, Georgios & Tsuchiya, Aki, 2013. "Sick but satisfied: The impact of life and health satisfaction on choice between health scenarios," Journal of Health Economics, Elsevier, vol. 32(4), pages 708-714.
    3. Chris Muris & Pedro Raposo & Sotiris Vandoros, 2020. "A dynamic ordered logit model with fixed effects," Papers 2008.05517, arXiv.org.
    4. Georgios Kavetsos & Ichiro Kawachi & Ilias Kyriopoulos & Sotiris Vandoros, 2021. "The effect of the Brexit referendum result on subjective well‐being," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 184(2), pages 707-731, April.
    5. Paul Dolan & Grace Lordan, 2021. "Climbing up ladders and sliding down snakes: an empirical assessment of the effect of social mobility on subjective wellbeing," Review of Economics of the Household, Springer, vol. 19(4), pages 1023-1045, December.
    6. Dolan, P. & Lordan, G., 2013. "Moving up and sliding down: An empirical assessment of the effect of social mobility on subjective wellbeing," Health, Econometrics and Data Group (HEDG) Working Papers 13/08, HEDG, c/o Department of Economics, University of York.
    7. Bussière, Clémence & Sirven, Nicolas & Tessier, Philippe, 2021. "Does ageing alter the contribution of health to subjective well-being?," Social Science & Medicine, Elsevier, vol. 268(C).
    8. Sotiris Vandoros & Georgios Kavetsos & Paul Dolan, 2014. "Greasy Roads: The Impact of Bad Financial News on Road Traffic Accidents," Risk Analysis, John Wiley & Sons, vol. 34(3), pages 556-566, March.
    9. Paul Dolan & Richard Layard & Robert Metcalfe, 2011. "Measuring Subjective Wellbeing for Public Policy: Recommendations on Measures," CEP Reports 23, Centre for Economic Performance, LSE.
    10. Ioana Ramia & Malina Voicu, 2022. "Life Satisfaction and Happiness Among Older Europeans: The Role of Active Ageing," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 160(2), pages 667-687, April.
    11. Antonella D’Agostino & Gaetano Grilli & Andrea Regoli, 2019. "The Determinants of Subjective Well-Being of Young Adults in Europe," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 14(1), pages 85-112, March.
    12. Lee, Henry & Vlaev, Ivo & King, Dominic & Mayer, Erik & Darzi, Ara & Dolan, Paul, 2013. "Subjective well-being and the measurement of quality in healthcare," Social Science & Medicine, Elsevier, vol. 99(C), pages 27-34.
    13. Mario García Molina & Liliana Alejandra Chicaíza Becerra, 2013. "Felicidad:¿reemplazar o mejorar la utilidad subjetiva?," Revista Cuadernos de Economía, Universidad Nacional de Colombia -FCE - CID, December.
    14. Dolan, Paul & Galizzi, Matteo M., 2015. "Like ripples on a pond: Behavioral spillovers and their implications for research and policy," Journal of Economic Psychology, Elsevier, vol. 47(C), pages 1-16.
    15. Stéphane Gregoir & Tristan‐Pierre Maury, 2013. "The Impact Of Social Housing On The Labour Market Status Of The Disabled," Health Economics, John Wiley & Sons, Ltd., vol. 22(9), pages 1124-1138, September.

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