Can Marginal Rates of Substitution Be Inferred from Happiness Data? Evidence from Residency Choices

43 Pages Posted: 21 Feb 2013 Last revised: 27 Feb 2014

Daniel J. Benjamin

USC, Center for Economic and Social Research (CESR); National Bureau of Economic Research (NBER)

Ori Heffetz

Cornell University - S.C. Johnson Graduate School of Management; Hebrew University of Jerusalem; National Bureau of Economic Research (NBER)

Miles S. Kimball

University of Michigan at Ann Arbor - Department of Economics; University of Colorado Boulder; Center for Economic and Social Research, USC; National Bureau of Economic Research (NBER)

Alex Rees-Jones

University of Pennsylvania - Operations & Information Management Department

Multiple version iconThere are 2 versions of this paper

Date Written: February 25, 2014

Abstract

We survey 561 students from U.S. medical schools shortly after they submit choice rankings over residencies to the National Resident Matching Program. We elicit (a) these choice rankings, (b) anticipated subjective well-being (SWB) rankings, and (c) expected features of the residencies (such as prestige). We find substantial differences between choice and anticipated-SWB rankings in the implied tradeoffs between residency features. In our data, evaluative SWB measures (life satisfaction and Cantril’s ladder) imply tradeoffs closer to choice than does affective happiness (even time-integrated), and as close as do multi-measure SWB indices. We discuss implications for using SWB data in applied work.

Keywords: happiness, life satisfaction, subjective well-being, preference, utility, revealed preference, marginal rate of substitution

JEL Classification: C81, D03, D69

Suggested Citation

Benjamin, Daniel J. and Heffetz, Ori and Kimball, Miles S. and Rees-Jones, Alex, Can Marginal Rates of Substitution Be Inferred from Happiness Data? Evidence from Residency Choices (February 25, 2014). American Economic Review, Forthcoming; Johnson School Research Paper Series No. 8-2013. Available at SSRN: https://ssrn.com/abstract=2221538 or http://dx.doi.org/10.2139/ssrn.2221538

Daniel J. Benjamin (Contact Author)

USC, Center for Economic and Social Research (CESR) ( email )

635 Downey Way
Los Angeles, CA 90089-3332
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National Bureau of Economic Research (NBER) ( email )

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Ori Heffetz

Cornell University - S.C. Johnson Graduate School of Management ( email )

324 Sage Hall
Ithaca, NY 14853
United States

Hebrew University of Jerusalem

Mount Scopus
Jerusalem, IL 91905
Israel

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

HOME PAGE: http://www.nber.org/~heffetz

Miles S. Kimball

University of Michigan at Ann Arbor - Department of Economics ( email )

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Ann Arbor, MI 48109-1220
United States
734-764-2375 (Phone)
734-764-2769 (Fax)

University of Colorado Boulder ( email )

Campus Box 256
Boulder, CO 80309
United States
303.492.8295 (Phone)
303.492.8960 (Fax)

HOME PAGE: http://www.colorado.edu/Economics/people/faculty/kimball.html

Center for Economic and Social Research, USC ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alex Rees-Jones

University of Pennsylvania - Operations & Information Management Department ( email )

Philadelphia, PA 19104
United States

HOME PAGE: http://https://opimweb.wharton.upenn.edu/profile/26948/

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