Well-Being and Public Policy

25 Pages Posted: 22 Nov 2014 Last revised: 5 Jul 2017

See all articles by John Bronsteen

John Bronsteen

Loyola University Chicago School of Law

Christopher Buccafusco

Duke University School of Law

Jonathan S. Masur

University of Chicago - Law School

Date Written: November 20, 2014


Governments rely on certain basic economic metrics and tools to analyze prospective laws and policies and to monitor how well their countries are doing. For decades, critics of such economic measures have argued that they ignore important aspects of value that are not fully reflected by output or by willingness to pay (WTP). In recent years, one of the most important developments in social science has been the emergence of psychological research measuring subjective well-being (SWB) or “happiness.” Researchers have made great strides in replicating and validating their findings about happiness, and world leaders have called for this research to be used to supply SWB-based metrics and tools as alternatives to the existing economic ones. In response to these calls, early efforts have been made to use SWB research to create new social indicators. In this chapter, we discuss some of the efforts that have been made in this regard. We first briefly explain the way that SWB is measured and the way those measurements have been validated. We then explain our own contribution — well-being analysis (WBA) — which uses happiness data to analyze prospective policies more accurately than does cost-benefit analysis. Next, we cover the ways in which SWB data have been used to generate prices that can be used by traditional economic analysis. We then discuss attempts to revise cost-benefit analysis to deal with the limitations stemming from the fact that it uses wealth to assess the effects of policy on quality of life. Finally, we lay out the strides that have been made toward creating an SWB-based alternative to GDP.

Keywords: subjective well-being, willingness to pay, willingness to accept, welfare, health, environment, pollution, value of statistical life, affective forecasting

Suggested Citation

Bronsteen, John and Buccafusco, Christopher J. and Masur, Jonathan S., Well-Being and Public Policy (November 20, 2014). The Oxford Handbook of Law & Economics, Volume I: Methodology and Concepts, pp. 381-405 (Francisco Parisi ed., 2017), University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 707 (2d Series), U of Chicago, Public Law Working Paper No. 495, Chicago-Kent College of Law Research Paper No. 2014-29, Loyola University Chicago School of Law Research Paper No. 2014-019, Available at SSRN: https://ssrn.com/abstract=2528727

John Bronsteen

Loyola University Chicago School of Law ( email )

Chicago, IL 60611
United States
312-654-1511 (Phone)
312-915-7201 (Fax)

HOME PAGE: http://www.luc.edu/law/fulltime/bronsteen.shtml

Christopher J. Buccafusco

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Jonathan S. Masur (Contact Author)

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States
773.702.5188 (Phone)

HOME PAGE: http://www.law.uchicago.edu/faculty/masur/

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