NBER Working Papers by Daniel J. Benjamin

Are subjective well-being (SWB) measures a good empirical proxy for utility? We evaluate one necessary assumption: that people’s preferences coincide with what they predict will maximize their SWB. Our method is to present survey respondents with hypothetical scenarios and elicit both choice and predicted SWB rankings of two alternatives. While choice and predicted SWB rankings usually coincide, we find systematic reversals. Furthermore, we identify factors—such as predicted sense of purpose, control over one‘s life, family happiness, and social status—that help explain choice controlling for predicted SWB. We explore how our findings vary with the SWB measure and the choice situation.

We randomly vary religious identity salience in laboratory subjects to test how identity salience contributes to six hypothesized links from prior literature between religious identity and economic behavior. We find that religious identity salience makes Protestants increase contributions to public goods. Catholics decrease contributions to public goods, expect others to contribute less to public goods, and become less risk averse. Jews more strongly reciprocate as an employee in a bilateral labor market gift-exchange game. We find no evidence of religious identity salience effects on disutility of work effort, discount rates, or generosity in a dictator game.

Social identities prescribe behaviors for people. We identify the marginal behavioral effect of these norms on discount rates and risk aversion by measuring how laboratory subjects’ choices change when an aspect of social identity is made salient. When we make ethnic identity salient to Asian-American subjects, they make more patient choices. When we make racial identity salient to black subjects, non-immigrant blacks (but not immigrant blacks) make more patient choices. Making gender identity salient has no effect on intertemporal or risk choices.

We showed 10-second, silent video clips of unfamiliar gubernatorial debates to a group of experimental participants and asked them to predict the election outcomes. The participants' predictions explain more than 20 percent of the variation in the actual two-party vote share across the 58 elections in our study, and their importance survives a range of controls, including state fixed effects. In a horse race of alternative forecasting models, participants' visual forecasts significantly outperform economic variables in predicting vote shares, and are comparable in predictive power to a measure of incumbency status. Adding policy information to the video clips by turning on the sound tends, if anything, to worsen participants' accuracy, suggesting that naïveté may be an asset in some foreca...