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Preferences and subjective satisfaction: measuring well-being on the job for policy evaluation

(2011) CESIFO ECONOMIC STUDIES. 57(4). p.683-714
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Abstract
Behavioural welfare economics has raised doubts about the use of revealed preferences as an indicator of ‘true’ individual well-being. Subjective satisfaction (‘happiness’) measures have become increasingly popular, as they seem to avoid paternalism while at the same time not being dependent on observed choice behaviour. We argue that there is a clash between using subjective satisfaction and respecting preferences, because the former also depends on aspirations. We propose the equivalent income indicator as an alternative cardinalization of the utility function. It does respect preferences but does not depend on aspirations. We apply our general ideas to one specific policy domain: monitoring job quality as individual well-being on the job. Our empirical results about the quality of jobs for school-leavers in Flanders show that the choice of a specific indicator of well-being is highly relevant from a policy point of view. The most popular measures that are in use now (the paternalist equal weights-indicator and subjective job satisfaction) may be misleading if they are not complemented by information about the other indicators
Keywords
social choice, LIFE, labour economics policies, LABOR, CHOICE, WORKERS, BRITAIN, QUALITY, HAPPINESS, welfare economics, ECONOMICS

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Chicago
Schokkaert, Erik, Luc Van Ootegem, and Elsy Verhofstadt. 2011. “Preferences and Subjective Satisfaction: Measuring Well-being on the Job for Policy Evaluation.” Cesifo Economic Studies 57 (4): 683–714.
APA
Schokkaert, Erik, Van Ootegem, L., & Verhofstadt, E. (2011). Preferences and subjective satisfaction: measuring well-being on the job for policy evaluation. CESIFO ECONOMIC STUDIES, 57(4), 683–714.
Vancouver
1.
Schokkaert E, Van Ootegem L, Verhofstadt E. Preferences and subjective satisfaction: measuring well-being on the job for policy evaluation. CESIFO ECONOMIC STUDIES. 2011;57(4):683–714.
MLA
Schokkaert, Erik, Luc Van Ootegem, and Elsy Verhofstadt. “Preferences and Subjective Satisfaction: Measuring Well-being on the Job for Policy Evaluation.” CESIFO ECONOMIC STUDIES 57.4 (2011): 683–714. Print.
@article{1992883,
  abstract     = {Behavioural welfare economics has raised doubts about the use of revealed preferences as an indicator of {\textquoteleft}true{\textquoteright} individual well-being. Subjective satisfaction ({\textquoteleft}happiness{\textquoteright}) measures have become increasingly popular, as they seem to avoid paternalism while at the same time not being dependent on observed choice behaviour. We argue that there is a clash between using subjective satisfaction and respecting preferences, because the former also depends on aspirations. We propose the equivalent income indicator as an alternative cardinalization of the utility function. It does respect preferences but does not depend on aspirations. We apply our general ideas to one specific policy domain: monitoring job quality as individual well-being on the job. Our empirical results about the quality of jobs for school-leavers in Flanders show that the choice of a specific indicator of well-being is highly relevant from a policy point of view. The most popular measures that are in use now (the paternalist equal weights-indicator and subjective job satisfaction) may be misleading if they are not complemented by information about the other indicators},
  author       = {Schokkaert, Erik and Van Ootegem, Luc and Verhofstadt, Elsy},
  issn         = {1610-241X},
  journal      = {CESIFO ECONOMIC STUDIES},
  keyword      = {social choice,LIFE,labour economics policies,LABOR,CHOICE,WORKERS,BRITAIN,QUALITY,HAPPINESS,welfare economics,ECONOMICS},
  language     = {eng},
  number       = {4},
  pages        = {683--714},
  title        = {Preferences and subjective satisfaction: measuring well-being on the job for policy evaluation},
  url          = {http://dx.doi.org/10.1093/cesifo/ifr018},
  volume       = {57},
  year         = {2011},
}

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