In this paper we examine whether, and how, welfare economics should incorporate some insights from happiness and satisfaction studies. Our main point, based on the principle of respecting the individuals’ judgments about their own lives, is that one should not focus on reported satisfaction levels but on the ordinal preferences reported by individuals over the various dimensions of life. We illustrate with data from the Russian Longitudinal Monitoring Survey (RLMS) how to retrieve this information from happiness surveys.
Citation: Fleurbaey, M., Schokkaert, E. and Decancq K. (2008). “What Good is Happiness?” OPHI Working Paper 20.