Do People Seek to Maximize Happiness? Evidence from New Surveys

Daniel J. Benjamin, Ori Heffetz, Miles S. Kimball, Alex Rees-Jones

NBER Working Paper No. 16489
Issued in October 2010
NBER Program(s):   AG   PE

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.

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This paper was revised on December 5, 2011

Acknowledgments

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