Happiness, Freedom and Control

Journal of Economic Behavior & Organization, Vol. 71, pp. 146-161, 2009

Bocconi University Econpubblica Working Paper No. 141/2009

24 Pages Posted: 12 Sep 2009

See all articles by Paolo Verme

Paolo Verme

World Bank Group; University of Turin - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 11, 2009

Abstract

Does freedom of choice have an intrinsic value for people and how do people value freedom of choice? Drawing on economics and social psychology the paper provides a theory and empirical evidence of how individuals may value freedom of choice and derive utility from it. It is argued that the degree of control that we think we have over choice regulates how we value freedom of choice and that each individual faces a freedom `threshold' beyond which more freedom turns into disutility. We find strong evidence in support of this hypothesis. Making use of a combination of all rounds of the World and European Values Surveys we find a variable that measures freedom and control to be the best predictor of life satisfaction worldwide. This variable predicts life satisfaction better than any other known factors such as employment, income or marriage in every country and across countries. A test shows that this variable is not a proxy of life satisfaction and that measures well both freedom and control. The implications of this finding for economics range from utility and choice theory to public policies.

Keywords: Happiness, Freedom, Control, Personality

JEL Classification: I31, Z1

Suggested Citation

Verme, Paolo, Happiness, Freedom and Control (September 11, 2009). Journal of Economic Behavior & Organization, Vol. 71, pp. 146-161, 2009. Available at SSRN: https://ssrn.com/abstract=1471556

Paolo Verme (Contact Author)

World Bank Group ( email )

Washington, DC 20433
United States

University of Turin - Department of Economics ( email )

Via Po, 53
Torino, 10124
Italy

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