Journal of Economic Perspectives: Vol. 20 No. 1 (Winter 2006)

Kahneman, Daniel, and Alan B. Krueger. 2006. "Developments in the Measurement of Subjective Well-Being." The Journal of Economic Perspectives, 20(1): 3-24.

DOI: 10.1257/089533006776526030

Direct reports of subjective well-being may have a useful role in the measurement of consumer preferences and social welfare, if they can be done in a credible way. Can well-being be measured by a subjective survey, even approximately? In this paper, we discuss research on how individuals' responses to subjective well-being questions vary with their circumstances and other factors. We will argue that it is fruitful to distinguish among different conceptions of utility rather than presume to measure a single, unifying concept that motivates all human choices and registers all relevant feelings and experiences. While various measures of well-being are useful for some purposes, it is important to recognize that subjective well-being measures features of individuals' perceptions of their experiences, not their utility as economists typically conceive of it. Those perceptions are a more accurate gauge of actual feelings if they are reported closer to the time of, and in direct reference to, the actual experience. We conclude by proposing the U- index, a misery index of sorts, which measures the proportion of time that people spend in an unpleasant state, and has the virtue of not requiring a cardinal conception of individuals' feelings.

Kahneman, Daniel
Krueger, Alan B.