BE 4: Subjective Wellbeing

Created by: charlie
Created on: 02-05-18 11:06

Neoclassical economics: Ordinalism (hedonic) too weak (restrictive)

Happiness and utility assumed and not measured (ONLY RANKED) , utility is determined by choices (objective), unable to do interpersonal comparison, can only use GDP as measure (output from production)

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Neoclassical: Cardinalism (evaluative) too strong

Happiness and utility can be measured (MAGNITUDE), necessary to determine public choice (overcome arrows impossibility theorem), interpersonal comparison

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Behavioural theory: Reported wellbeing function (mix)

Utility cannot be measured, but we can get a signal from SWB report (carries some information that can be used to drive policies)

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Behavioural theory: Reported wellbeing function ISSUES

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Behavioural theory: Reported wellbeing function EVIDENCE

SWB clear correlation with objective measures on quality of life (pollution, climate, crime...)

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Neoclassical puzzle: Easterlin Paradox (X-Section)

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Neoclassical puzzle: Easterlin Paradox (Time-series)

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Behavioural patch: Theory of relative income (Adaption to what others have)

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Behavioural patch: Empirics Theory of relative income

Neoclassical: increasing wealth increases utility up to a point/ Behavioural: past this point increasing wealth increases utility relative to others

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Behavioural patch: Theory of relative income (Adaption to habit formation)

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Empirics: Happiness & Productivity (exp 1)

Individuals treated with ST comedy clip (exogenous) were more happy and as result more productive (ST)

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Empirics: Happiness & Productivity (exp 2)

Individuals who experienced bad life event (exogenous) were less happy and less productive (LT)

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Other cards in this set

Card 2

Front

Neoclassical: Cardinalism (evaluative) too strong

Back

Happiness and utility can be measured (MAGNITUDE), necessary to determine public choice (overcome arrows impossibility theorem), interpersonal comparison

Card 3

Front

Behavioural theory: Reported wellbeing function (mix)

Back

Card 4

Front

Behavioural theory: Reported wellbeing function ISSUES

Back

Card 5

Front

Behavioural theory: Reported wellbeing function EVIDENCE

Back

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BE 4: Subjective Wellbeing