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Do People Seek to Maximize Happiness? Evidence from New Surveys

  • Daniel J. Benjamin
  • Ori Heffetz
  • Miles S. Kimball
  • Alex Rees-Jones

Are subjective well-being (SWB) measures a good empirical proxy for utility? We evaluate one necessary assumption: that people's preferences coincide with what they predict will maximize their SWB. Our method is to present survey respondents with hypothetical scenarios and elicit both choice and predicted SWB rankings of two alternatives. While choice and predicted SWB rankings usually coincide, we find systematic reversals. Furthermore, we identify factors--such as predicted sense of purpose, control over one's life, family happiness, and social status--that help explain choice controlling for predicted SWB. We explore how our findings vary with the SWB measure and the choice situation.

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File URL: http://www.nber.org/papers/w16489.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16489.

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Date of creation: Oct 2010
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Publication status: published as Benjamin, Daniel J., Ori Heffetz, Miles S. Kimball, and Alex Rees-Jones. 2012. What Do You Think Would Make You Happier? What Do You Think You Would Choose? American Economic Review, 102(5): 2083–2110. [SSRN version] An older version circulated as Do People Seek to Maximize Happiness? Evidence from New Surveys. [Web Appendix] [NBER WP w16489 at SSRN]
Handle: RePEc:nbr:nberwo:16489
Note: AG PE
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  1. Laibson, David I., 1997. "Golden Eggs and Hyperbolic Discounting," Scholarly Articles 4481499, Harvard University Department of Economics.
  2. Stevenson, Betsey & Wolfers, Justin, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," IZA Discussion Papers 3654, Institute for the Study of Labor (IZA).
  3. Stevenson, Betsey & Wolfers, Justin, 2009. "The Paradox of Declining Female Happiness," IZA Discussion Papers 4200, Institute for the Study of Labor (IZA).
  4. 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.
  5. Di Tella, Rafael & MacCulloch, Robert J. & Oswald, Andrew J., 2001. "The Macroeconomics of Happiness," The Warwick Economics Research Paper Series (TWERPS) 615, University of Warwick, Department of Economics.
  6. Welsch, Heinz, 2009. "Implications of happiness research for environmental economics," Ecological Economics, Elsevier, vol. 68(11), pages 2735-2742, September.
  7. Stutzer, Alois & Frey, Bruno S., 2004. "Stress That Doesn't Pay: The Commuting Paradox," IZA Discussion Papers 1278, Institute for the Study of Labor (IZA).
  8. Tsutsui, Yoshiro & Kimball, Miles & Ohtake, Fumio, 2010. "Koizumi carried the day: Did the Japanese election results make people happy and unhappy?," European Journal of Political Economy, Elsevier, vol. 26(1), pages 12-24, March.
  9. David G. Blanchflower & Andrew J. Oswald, 2004. "Money, Sex and Happiness: An Empirical Study," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 393-415, October.
  10. Erzo F.P. Luttmer, 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," NBER Working Papers 10667, National Bureau of Economic Research, Inc.
  11. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
  12. Finkelstein, Amy & Luttmer, Erzo F. P. & Notowidigdo, Matthew J., 2008. "What Good Is Wealth without Health? The Effect of Health on the Marginal Utility of Consumption," Working Paper Series rwp08-036, Harvard University, John F. Kennedy School of Government.
  13. Miles Kimball & Helen Levy & Fumio Ohtake & Yoshiro Tsutsui, 2006. "Unhappiness after Hurricane Katrina," NBER Working Papers 12062, National Bureau of Economic Research, Inc.
  14. Bruno Frey & Simon Luechinger & Alois Stutzer, 2009. "The life satisfaction approach to valuing public goods: The case of terrorism," Public Choice, Springer, vol. 138(3), pages 317-345, March.
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