Teaser • All things considered, how happy have you been these days out of 10?
Frey & Stutzer 2002 • If the content of utility can be measured, then economists should consider using that content instead of the current content-free method. • The content of utility, in the form of subjective well-being, can be measured. • Therefore, economists should consider using that content instead of the current content-free method.
Is subjective well-being (SWB) an appropriate content for utility? • Is SWB the right kind of thing to fill utility? • It’s a very good fit conceptually • But, it will only work if it can be objectively measured
What is the evidence for subjective well-being being measurable? • Introspective • Self-reports • Observing behaviour • Brain scans
Introspection • Ask yourself how you feel about your life • We may be bad at predicting what will bring us happiness but we are quite good at assessing our current emotional state and our satisfaction with our life • But sometimes we are affected by biases
Self-Reports • Communicating your introspection • Usually by questionnaires • But biases can affect the results • Kahneman
Observing Behaviour • Smiling (real smiles) • Does away with many biases from self-reports buts adds other problems (similar to the ones with the current economic model
Brain Scans • Various methods including EEG • Left vs. right hemisphere brain activity • More left hemisphere brain activity at ‘rest’ = positive affect • More right hemisphere brain activity at ‘rest’ = negative affect • Correlated with behaviour and self-reports • But best fit still only about 0.2
What are the other considerations when deciding whether to use subjective well-being as the content for utility? • Practical considerations • Philosophical considerations
What is the future for subjective well-being as the content for utility? • Well-being can be measured but practical and philosophical considerations must be taken into account • Other measures need to be taken into account