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1、SubjectiveWell-Being,Income,EconomicDevelopmentandGrowthDanSacks,BetseyStevensonandJustinWolfersWhartonSchool,UniversityofPennsylvaniaandNBERWorldBankWorkshop,NYU—October8,2010.ImplicationsoftheEasterlinParadoxSacks,Stevenson&Wolfers,IncomeandHappiness2“Whydonationalcomparisonsamongcountriesa
2、ndovertimeshowanassociationbetweenincomeandhappinesswhichissomuchweakerthan,ifnotinconsistentwith,thatshownbywithin-countrycomparisons?”–Easterlin(1974)Reference-dependentpreferencesRelativeincomematters[Otherpeople’sconsumptionmatters]Habitformation=hedonictreadmill[Otherperiod’sconsumption]
3、Policyimplications:Growth:“Myresults,alongwithmountingevidencefromothertimeseriesstudiesofsubjectivewell-being,doonbalanceunderminetheviewthatafocusoneconomicgrowthisinthebestinterestsofsociety.”–Easterlin(2005)Publicfinance:Ifpreferencesareinterdependent?Pigouvianrationalefortaxinglaborsuppl
4、y/conspicuousconsumptionSubjectiveWell-beingSacks,Stevenson&Wolfers,IncomeandHappiness3“Subjectivewell-beingreferstoallofthevarioustypesofevaluations,bothpositiveandnegative,thatpeoplemakeoftheirlives.Itincludesreflectivecognitiveevaluations,suchaslifesatisfactionandworksatisfaction,interesta
5、ndengagement,andaffectivereactionstolifeevents,suchasjoyandsadness.”(Diener,2005)Typicalquestions:Happiness“Takingallthingstogether,wouldyousayyouare:veryhappy;quitehappy;notveryhappy;notatallhappy.”Lifesatisfaction“Allthingsconsidered,howsatisfiedareyouwithyourlifeasawholethesedays?”[1=Dissa
6、tisfied–10=Satisfied]Satisfactionladder:“Hereisaladderrepresentingthe‘ladderoflife’.Let'ssupposethetopoftheladderrepresentsthebestpossiblelifeforyou,andthebottom,theworsepossiblelifeforyou.Onwhichstepoftheladderdoyoufeelyoupersonallystandatthepresenttime?[0-10steps].”ResearchQuestion:Whatisth
7、eRelationshipBetweenSubjectiveWell-beingandIncome?Sacks,Stevenson&Wolfers,IncomeandHappiness4Typesofcomparisons1970sview“EasterlinParadox”1990sview“Satiation”Newview: Stevenson-WolfersfindingsWithincountry:Richv.poorpeopleinacountryBigeffects
