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The gustibus errari (pot)est”:utility misprediction, preferences for well-being and life satisfaction"

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The life satisfaction literature generally focuses on how life events affect subjective well-being. Through a contingent valuation survey we test whether well-being preferences have significant impact on life satisfaction. A sample of respondents is asked to simulate a policymaker decision consisting in allocating scarce financial resources among 11 well-being domains. Consistently with the utility misprediction hypothesis, we find that the willingness to invest more in the economic well-being domain is negatively correlated with life satisfaction. Our findings are shown to be robust when we account for unobservables related to economic fragility and non-random sample selection. Revers e causality and omitted variable bias are controlled for with instrumental variables and a sensitivity analysis on departures from exogeneity assumptions. Subsample estimates document that the less educated are more affected by the problem.

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  • Bechetti, Leonardo & Conzo, Pierluigi, 2014. "The gustibus errari (pot)est”:utility misprediction, preferences for well-being and life satisfaction"," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201421, University of Turin.
  • Handle: RePEc:uto:dipeco:201421
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    2. Andrea Bonanomi & Francesca Luppi, 2020. "A European Mixed Methods Comparative Study on NEETs and Their Perceived Environmental Responsibility," Sustainability, MDPI, vol. 12(2), pages 1-24, January.

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    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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