Environmental and Resource Economics

, Volume 32, Issue 1, pp 161–181

Experienced Utility as a Standard of Policy Evaluation


DOI: 10.1007/s10640-005-6032-4

Cite this article as:
Kahneman, D. & Sugden, R. Environ Resource Econ (2005) 32: 161. doi:10.1007/s10640-005-6032-4


This paper explores the possibility of basing economic appraisal on the measurement of experienced utility (utility as hedonic experience) rather than decision utility (utility as a representation of preference). Because of underestimation of the extent of hedonic adaptation to changed circumstances and because of the “focusing illusion” (exaggerating the importance of the current focus of one’s attention), individuals’ forecasts of experienced utility are subject to systematic error. Such errors induce preference anomalies which the experienced utility approach might circumvent. The “day reconstruction method” of measuring experienced utility is considered as a possible alternative to stated preference methods.


contingent valuation day reconstruction method experienced utility focusing illusion 

Copyright information

© Springer 2005

Authors and Affiliations

  1. 1.Woodrow Wilson School of Public and International AffairsPrinceton UniversityPrincetonUSA
  2. 2.School of EconomicsUniversity of East AngliaNorwichUK