Do People Seek to Maximize Happiness? Evidence from New Surveys
Daniel J. Benjamin
Center for Economic and Social Research (CESR), USC; National Bureau of Economic Research (NBER)
Cornell University - S.C. Johnson Graduate School of Management; National Bureau of Economic Research (NBER)
Miles S. Kimball
University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)
University of Pennsylvania - Operations & Information Management Department
NBER Working Paper No. w16489
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.
Number of Pages in PDF File: 48
Date posted: October 25, 2010
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