Maximising Happiness?
Institute for Empirical Research in Economics Working Paper No. 22
24 Pages Posted: 11 Jan 2000
Date Written: October 1999
Abstract
The measurement of individual happiness challenges the notion that revealed preferences only reliably and empirically reflect individual utility. Reported subjective well-being is a broader concept than traditional decision utility; it also includes concepts like experience and procedural utility. Micro- and macroeconometric happiness functions offer new insights on determinants of life satisfaction. However, one should not leap to the conclusion that happiness should be maximised, as was suggested for social welfare function maximisation. In contrast, happiness research strengthens the validity of an institutional approach, such as reflected in the theory of democratic economic policy.
JEL Classification: D60, D71, I31
Suggested Citation: Suggested Citation
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