From Happiness Data to Economic Conclusions

Forthcoming, Annual Review of Economics. https://doi.org/10.1146/annurev-economics-081623-021136

54 Pages Posted: 14 Sep 2023

See all articles by Daniel J. Benjamin

Daniel J. Benjamin

Anderson School of Management; Human Genetics Department, David Geffen School of Medicine; National Bureau of Economic Research (NBER)

Kristen B. Cooper

Gordon College

Ori Heffetz

Cornell University - S.C. Johnson Graduate School of Management; The Hebrew University of Jerusalem - Department of Economics and Center for Rationality; National Bureau of Economic Research (NBER)

Miles S. Kimball

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

Date Written: September 11, 2023

Abstract

Happiness data—survey respondents’ self-reported well-being (SWB)—have become increasingly common in economics research, with recent calls to use them in policymaking. Researchers have used SWB data in novel ways, for example to learn about welfare or preferences when choice data are unavailable or difficult to interpret. Focusing on leading examples of this pioneering research, the first part of this review uses a simple theoretical framework to reverse-engineer some of the crucial assumptions that underlie existing applications. The second part discusses evidence bearing on these assumptions and provides practical advice to the agencies and institutions that generate SWB data, the researchers who use them, and the policymakers who may use the resulting research. While we advocate creative uses of SWB data in economics, we caution that their use in policy will likely require both additional data collection and further research to better understand the data.

Keywords: happiness, life satisfaction, self-reported well-being, welfare measures, preferences, survey methodology

JEL Classification: D60, D63, D90, I31

Suggested Citation

Benjamin, Daniel J. and Benjamin, Daniel J. and Cooper, Kristen B. and Heffetz, Ori and Kimball, Miles S., From Happiness Data to Economic Conclusions (September 11, 2023). Forthcoming, Annual Review of Economics. https://doi.org/10.1146/annurev-economics-081623-021136, Available at SSRN: https://ssrn.com/abstract=4568056 or http://dx.doi.org/10.2139/ssrn.4568056

Daniel J. Benjamin

Anderson School of Management ( email )

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Human Genetics Department, David Geffen School of Medicine ( email )

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Kristen B. Cooper

Gordon College ( email )

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Ori Heffetz (Contact Author)

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

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The Hebrew University of Jerusalem - Department of Economics and Center for Rationality

Mount Scopus
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National Bureau of Economic Research (NBER)

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

Miles S. Kimball

University of Colorado Boulder ( email )

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

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