Working Paper: NBER ID: w18374
Authors: Daniel J. Benjamin; Ori Heffetz; Miles S. Kimball; Nichole Szembrot
Abstract: This paper proposes foundations and a methodology for survey-based tracking of well-being. First, we develop a theory in which utility depends on "fundamental aspects" of well-being, measurable with surveys. Second, drawing from psychologists, philosophers, and economists, we compile a comprehensive list of such aspects. Third, we demonstrate our proposed method for estimating the aspects' relative marginal utilities--a necessary input for constructing an individual-level well-being index--by asking ~4,600 U.S. survey respondents to state their preference between pairs of aspect bundles. We estimate high relative marginal utilities not only for happiness and life satisfaction, but also for aspects related to family, health, security, values, and freedoms.
Keywords: wellbeing; subjective wellbeing; survey methodology; marginal utility
JEL Codes: A13; D69; E01; I31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| stated preferences of respondents (D12) | relative marginal utilities of happiness (D11) |
| stated preferences of respondents (D12) | relative marginal utilities of life satisfaction (D11) |
| relative marginal utilities of happiness (D11) | overall wellbeing (I31) |
| relative marginal utilities of life satisfaction (D11) | overall wellbeing (I31) |
| relative marginal utilities of family wellbeing (D11) | overall wellbeing (I31) |
| relative marginal utilities of health (I12) | overall wellbeing (I31) |
| relative marginal utilities of security (D81) | overall wellbeing (I31) |
| relative marginal utilities of moral values (A13) | societal preference for wellbeing dimensions (I31) |
| relative marginal utilities of freedoms (D11) | societal preference for wellbeing dimensions (I31) |