On the Common Claim that Happiness Equations Demonstrate Diminishing Marginal Utility of Income

7 Pages Posted: 18 Oct 2005

See all articles by Andrew J. Oswald

Andrew J. Oswald

University of Warwick - Department of Economics; IZA Institute of Labor Economics

Date Written: September 2005

Abstract

It is commonly claimed in the recent happiness literature in psychology and economics that we have proved diminishing marginal utility of income. This paper suggests that we have not. It draws a distinction between concavity of the utility function and concavity of the reporting function.

Keywords: happiness, money, marginal utility, curvature, concave

JEL Classification: I3, D1

Suggested Citation

Oswald, Andrew J., On the Common Claim that Happiness Equations Demonstrate Diminishing Marginal Utility of Income (September 2005). IZA Discussion Paper No. 1781, Available at SSRN: https://ssrn.com/abstract=826388 or http://dx.doi.org/10.2139/ssrn.826388

Andrew J. Oswald (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
523510 (Phone)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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