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Preferences and Subjective Satisfaction: Measuring Well-being on the Job for Policy Evaluation


  • Erik Schokkaert
  • Luc Van Ootegem
  • Elsy Verhofstadt


Behavioural welfare economics has raised doubts about the use of revealed preferences as an indicator of 'true' individual well-being. Subjective satisfaction ('happiness') measures have become increasingly popular, as they seem to avoid paternalism while at the same time not being dependent on observed choice behaviour. We argue that there is a clash between using subjective satisfaction and respecting preferences, because the former also depends on aspirations. We propose the equivalent income indicator as an alternative cardinalization of the utility function. It does respect preferences but does not depend on aspirations. We apply our general ideas to one specific policy domain: monitoring job quality as individual well-being on the job. Our empirical results about the quality of jobs for school-leavers in Flanders show that the choice of a specific indicator of well-being is highly relevant from a policy point of view. The most popular measures that are in use now (the paternalist equal weights-indicator and subjective job satisfaction) may be misleading if they are not complemented by information about the other indicators. (JEL codes: J28, D63, D71) Copyright The Author 2011. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved. For permissions, please email:, Oxford University Press.

Suggested Citation

  • Erik Schokkaert & Luc Van Ootegem & Elsy Verhofstadt, 2011. "Preferences and Subjective Satisfaction: Measuring Well-being on the Job for Policy Evaluation," CESifo Economic Studies, CESifo, vol. 57(4), pages 683-714, December.
  • Handle: RePEc:oup:cesifo:v:57:y:2011:i:4:p:683-714

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    References listed on IDEAS

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    Cited by:

    1. Dat Vu Hoang & Laure Pasquier-Doumer, 2016. "Weighting deprivations using subjective well-being: An application to the Multidimensional Child Poverty Index in Vietnam," Working Papers DT/2016/01, DIAL (Développement, Institutions et Mondialisation).
    2. Koen Decancq & Dirk Neumann, 2014. "Does the Choice of Well-Being Measure Matter Empirically?: An Illustration with German Data," SOEPpapers on Multidisciplinary Panel Data Research 717, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. O'Donnell, Gus & Oswald, Andrew J., 2015. "National well-being policy and a weighted approach to human feelings," Ecological Economics, Elsevier, vol. 120(C), pages 59-70.
    4. DECANCQ, Koen & FLEURBAEY, Marc & SCHOKKAERT, Erik, 2014. "Inequality, income, and well-being," CORE Discussion Papers 2014018, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Philipp Poppitz, 2017. "Can subjective data improve inequality measurement? A multidimensional index of economic inequality," Working Papers 446, ECINEQ, Society for the Study of Economic Inequality.
    6. Koen Decancq & Erik Schokkaert, 2016. "Beyond GDP: Using Equivalent Incomes to Measure Well-Being in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(1), pages 21-55, March.
    7. Andres Felipe Hoyos Martin, 2015. "Measuring and Comparing Well-Being in South American Countries Using Equivalent Incomes," ICESI ECONOMICS WORKING PAPERS 014570, UNIVERSIDAD ICESI.
    8. Koen Decancq & Luc Van Ootegem & Elsy Verhofstadt, 2013. "What If We Voted on the Weights of a Multidimensional Well‐Being Index? An Illustration with Flemish Data," Fiscal Studies, Institute for Fiscal Studies, vol. 34, pages 315-332, September.
    9. Werner Bönte & Stefan Krabel, 2014. "You can't always get what you want: gender differences in job satisfaction of university graduates," Applied Economics, Taylor & Francis Journals, vol. 46(21), pages 2477-2487, July.
    10. repec:kap:jecinq:v:15:y:2017:i:4:d:10.1007_s10888-017-9369-3 is not listed on IDEAS
    11. repec:kap:jecinq:v:15:y:2017:i:4:d:10.1007_s10888-017-9370-x is not listed on IDEAS

    More about this item

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations


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