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Subjective Well-Being as Welfare Measure: Concepts and Methodology

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  • Fischer, Justina AV
Abstract
Happiness research is on the rise, but is confounded by competing definitions of subjective well-being based on co-existing concepts, resulting in differing measures and giving rise to different potential policy applications. This paper motivates the societal necessity for using well-being indicators and gives a short overview of the relation between the concepts ‘subjective well-being’, ‘affect’, ‘life satisfaction’, and ‘happiness’. It describes their measurements and operationalizations in surveys, illustrates their philosophical roots, discusses their validity and reliability, and attempts to shed light on the scope of their policy applicability. Focus of this paper is on practical issues when applying measures of subjective well-being for policy evaluations. Target audiences of this paper are the interested public and laypersons, non-expert economists, and statisticians.

Suggested Citation

  • Fischer, Justina AV, 2009. "Subjective Well-Being as Welfare Measure: Concepts and Methodology," MPRA Paper 16619, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:16619
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    References listed on IDEAS

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    1. Justina A. V. Fischer & Alfonso Sousa-Poza, 2008. "Personality, Job Satisfaction and Health - The Mediating Influence of Affectivity," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(III), pages 379-435, September.
    2. Mary C. Daly & Daniel J. Wilson & Norman J. Johnson, 2013. "Relative Status and Well-Being: Evidence from U.S. Suicide Deaths," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1480-1500, December.
    3. Blanchflower, David G. & Oswald, Andrew J., 2008. "Hypertension and happiness across nations," Journal of Health Economics, Elsevier, vol. 27(2), pages 218-233, March.
    4. Ateca-Amestoy, Victoria & Serrano-del-Rosal, Rafael & Vera-Toscano, Esperanza, 2008. "The leisure experience," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(1), pages 64-78, February.
    5. Angus Deaton, 2010. "Income, Aging, Health and Well-Being around the World: Evidence from the Gallup World Poll," NBER Chapters, in: Research Findings in the Economics of Aging, pages 235-263, National Bureau of Economic Research, Inc.
    6. Courard-Hauri, David, 2007. "Using Monte Carlo analysis to investigate the relationship between overconsumption and uncertain access to one's personal utility function," Ecological Economics, Elsevier, vol. 64(1), pages 152-162, October.
    7. Ruut Veenhoven, 2000. "The Four Qualities of Life," Journal of Happiness Studies, Springer, vol. 1(1), pages 1-39, March.
    8. Stefania Mojon-Azzi & Alfonso Sousa-Poza, 2007. "Hypertension And Life Satisfaction: A Comment And Replication Of Blanchflower And Oswald (2007)," University of St. Gallen Department of Economics working paper series 2007 2007-44, Department of Economics, University of St. Gallen.
    9. Daniel Kahneman & Richard H. Thaler, 2006. "Anomalies: Utility Maximization and Experienced Utility," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 221-234, Winter.
    10. Willem Saris & Theresia van Wijk & Annette Scherpenzeel, 1998. "Validity and Reliability of Subjective Social Indicators: The effect of different measures of association," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 45(1), pages 173-199, November.
    11. Fischer, Justina AV, 2009. "Happiness and age cycles – return to start…," MPRA Paper 15249, University Library of Munich, Germany.
    12. David Dorn & Justina Fischer & Gebhard Kirchgässner & Alfonso Sousa-Poza, 2008. "Direct democracy and life satisfaction revisited: new evidence for Switzerland," Journal of Happiness Studies, Springer, vol. 9(2), pages 227-255, June.
    13. Daniel Kahneman & Alan B. Krueger, 2006. "Developments in the Measurement of Subjective Well-Being," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 3-24, Winter.
    14. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    15. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
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    Cited by:

    1. Miika Mäki & Anna Erika Hägglund & Anna Rotkirch & Sangita Kulathinal & Mikko Myrskylä, 2022. "Stable marital histories predict happiness and health across educational groups," MPIDR Working Papers WP-2022-035, Max Planck Institute for Demographic Research, Rostock, Germany.
    2. Bjornskov, Christian & Dreher, Axel & Fischer, Justina AV & Schnellenbach, Jan, 2009. "On the relation between income inequality and happiness: Do fairness perceptions matter?," MPRA Paper 19494, University Library of Munich, Germany.
    3. Walther, Lena & Fuchs, Lukas M. & Schupp, Jürgen & Scheve, Christian von, 2020. "Living Conditions and the Mental Health and Well-being of Refugees : Evidence from a Large-Scale German Survey," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 22, pages 903-913.
    4. Bjørnskov, Christian & Dreher, Axel & Fischer, Justina A.V. & Schnellenbach, Jan & Gehring, Kai, 2013. "Inequality and happiness: When perceived social mobility and economic reality do not match," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 75-92.
    5. Andrew E. Clark, 2015. "SWB as a Measure of Individual Well-Being," Working Papers halshs-01134483, HAL.
    6. Bjørnskov, Christian & Dreher, Axel & Fischer, Justina A.V., 2010. "Formal institutions and subjective well-being: Revisiting the cross-country evidence," European Journal of Political Economy, Elsevier, vol. 26(4), pages 419-430, December.
    7. Boyd-Swan, Casey & Herbst, Chris M. & Ifcher, John & Zarghamee, Homa, 2013. "The Earned Income Tax Credit, Health, and Happiness," IZA Discussion Papers 7261, Institute of Labor Economics (IZA).
    8. Lewczuk Anna, 2018. "Empowerment Rights and Happiness Gap in Post-socialist Countries," Central European Economic Journal, Sciendo, vol. 5(52), pages 270-295, January.
    9. Kant, Shashi & Vertinsky, Ilan & Zheng, Bin & Smith, Peggy M., 2014. "Multi-Domain Subjective Wellbeing of Two Canadian First Nations Communities," World Development, Elsevier, vol. 64(C), pages 140-157.
    10. Herbst, Chris M., 2011. "‘Paradoxical’ decline? Another look at the relative reduction in female happiness," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 773-788.
    11. Christian Scheve & Frederike Esche & Jürgen Schupp, 2017. "The Emotional Timeline of Unemployment: Anticipation, Reaction, and Adaptation," Journal of Happiness Studies, Springer, vol. 18(4), pages 1231-1254, August.
    12. Tineke DeJonge & Ruut Veenhoven & Wim Kalmijn & Lidia Arends, 2016. "Pooling Time Series Based on Slightly Different Questions About the Same Topic Forty Years of Survey Research on Happiness and Life Satisfaction in The Netherlands," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(2), pages 863-891, March.
    13. Senakpon F. A. Dedehouanou & Johan Swinnen & Miet Maertens, 2013. "Does Contracting Make Farmers Happy? Evidence from Senegal," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59, pages 138-160, October.
    14. Fischer, Justina AV, 2009. "The Welfare Effects of Social Mobility: An Analysis for OECD countries," MPRA Paper 17070, University Library of Munich, Germany.
    15. Fischer, Justina AV, 2010. "Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects versus Region Fixed Effects," MPRA Paper 22272, University Library of Munich, Germany.
    16. Boyd-Swan, Casey & Herbst, Chris M., 2012. "Pain at the pump: Gasoline prices and subjective well-being," Journal of Urban Economics, Elsevier, vol. 72(2), pages 160-175.
    17. Chris Herbst, 2013. "Welfare reform and the subjective well-being of single mothers," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(1), pages 203-238, January.
    18. Dedehouanou, Senakpon & Maertens, Miet, 2011. "Participation in Modern Agri-Food Supply Chain in Senegal and Happiness," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114447, European Association of Agricultural Economists.
    19. Herbst, Chris M. & Lucio, Joanna, 2014. "Happy in the Hood? The Impact of Residential Segregation on Self-Reported Happiness," IZA Discussion Papers 7944, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Happiness; Life Satisfaction; Subjective Well-Being; Concepts; Methodology; Measurement; Econometrics; History; Behavioral Economics;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • Z0 - Other Special Topics - - General
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • B11 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Preclassical (Ancient, Medieval, Mercantilist, Physiocratic)
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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