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Preferences for Well-Being and Life Satisfaction

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Abstract

We test whether preferences over different well-being domains significantly correlate with life satisfaction. A sample of respondents is asked to simulate a policymaker decision consisting in allocating hypothetical financial resources among 11 well-being domains. We find that the willingness to invest more in the economic well-being domain is negatively correlated with life satisfaction. We argument that this evidence, while not excluding other rationales, is consistent with the utility misprediction hypothesis suggesting that individuals make systematic errors in estimating the well-being implied from their choices. Subsample estimates document that the less educated are more affected by the problem.

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Notes

  1. On the literature on social relationships and subjective wellbeing see, among others, Helliwell and Putnam (2004), Bartolini et al. (2013a, b) and Becchetti et al. (2008).

  2. Downloadable at http://www.stiglitz-sen-fitoussi.fr/documents/rapport_anglais.pdf.

  3. The complete list of the 134 specific indicators created in the different BES domains by ISTAT is attached in ESM Appendix A. For a more complete and detailed information on the process of BES creation see the English version of the ISTAT/BES official website: http://www.misuredelbenessere.it/index.php?id=48.

  4. With subjective wellbeing indicators we may have the paradox of individuals who behave as “happy slaves” reducing aspirations to the low level of their achievements, thereby lacking of desire for social progress. Sen illustrates the point by arguing that “The defeated and the downtrodden come to lack the courage to desire things that others more favourably treated by society desire with easy confidence” (Sen 1985: 15).

  5. Subjective indicators occupy in the BES only one of the 12 domains (n.8 subjective wellbeing) while few subjective indicators are included to complement objective indicators in some selected domains (i.e. those of economic wellbeing, health, safety) (for further details see ESM Appendix A and B). Note as well that, in spite of its limits and potential manipulations, subjective wellbeing worth being measured since satisfaction/lack of satisfaction with life is highly likely to have repercussions on objective indicators such as health, social capital and political stability.

  6. Messaggero, has a reputation of moderate conservative political orientation and is the fifth most red Italian newspaper (excluding sport newspapers).

  7. Avvenire, is the most important Italian catholic newspaper. As such it reflects the ideological divide of Italian believers which are equally divided between right and left wing orientation.

  8. Unità has a left wing tradition being the official newspaper of the Democrat Party.

  9. These are Forum Nazionale Terzo Settore, FQTS, ARCI, ConVol, CSV Net, Labsus, Dignità del lavoro, Auser, Avis, Anpas, Bandiera Gialla, La perfetta letizia, Mondo alla Rovescia, Confini online, Il Metapontino.it, ARCI, Campania, Blog vitobiolchini, Domos (domotica sociale).

  10. An inescapable limit of our online survey is that it is not representative of the Italian population. Online compilation in fact automatically selects a subsample of individuals who tend to be relatively younger and more educated than average. This limit is at the same time an interesting aspect of our survey since the composition of our sample anticipates characteristics of the future population which is bound to be more educated in the future. Also for this reason we may have a specific interest in investigating the relationship at stake in this specific group of the population. From another point of view lack of representativeness of our sample with respect to the Italian population is a common characteristics of many econometric studies which are not interested in descriptive traits of the universe of reference but to econometric links in that specific sample. Last but not least, subsample estimates for high/low educated respondents help us to correct the bias and to understand what happens in the subsample of the less educated which is closer to country average characteristics. We also correct our main estimates for non-representativeness of our sample with specific design weights described in section A4.4 of ESM Appendix A.

  11. Note that the survey question changes when we ask preferences about subdomain specific indicators (from the simulation of an invested sum to an more general indication of priorities). This is because some of these indicators are subjective and it is not clear whether others may be affected by government expenditure (see ESM Appendix B).

  12. Using self-declared levels of life satisfaction as a proxy for individual utility is a standard approach in the literature on subjective well-being and happiness economics [see, e.g., Frey and Stutzer (2002), Layard (2005), Di Tella and MacCulloch (2006) and Stutzer and Frey (2010), as well as in psychology (e.g., Kahneman et al. 1999; Diener et al. 1999). As is well known alternative subjective wellbeing measures are of affective (negative/positive affect) and eudaimonic (evaluation of the sense of one’s own life) type. The cognitive measure we adopt is however probably the most widely used at least in the economic literature on life satisfaction.

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Acknowledgements

The paper is part of a research coordinated by Laboratorio RicercAzione from Formazione Quadri Terzo Settore and sponsored by Fondazione con il Sud. The authors thank all the scientific board of FQTS, ISTAT and Fondazione con il Sud for their support, Stefano Bartolini, Tommaso Proietti and Maurizio Pugno for comments and suggestions, Sante Orsini, Roberto Porciello, Fabiola Riccardini and Focusmarketing for their precious coordination and research assistance in building the online survey and providing relevant data. Finally we thank the newspapers Messaggero, Avvenire and Unità for hosting the survey.

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Authors and Affiliations

  1. Department of Economics, University of Rome “Tor Vergata”, Via Columbia 2, 00133, Rome, Italy

    Leonardo Becchetti

  2. CSEF, Naples (Italy) & Collegio Carlo Alberto, Turin, Italy

    Pierluigi Conzo

  3. Department of Economics and Statistics “Cognetti de Martiis”, University of Turin, Turin, Italy

    Pierluigi Conzo

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  1. Leonardo Becchetti
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  2. Pierluigi Conzo
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Correspondence to Leonardo Becchetti.

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Becchetti, L., Conzo, P. Preferences for Well-Being and Life Satisfaction. Soc Indic Res 136, 775–805 (2018). https://doi.org/10.1007/s11205-017-1566-8

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