Destruction and distress: using a quasi-experiment to show the effects of the September 11 attacks on mental well-being in the United Kingdom

Title: Destruction and distress: using a quasi-experiment to show the effects of the September 11 attacks on mental well-being in the United Kingdom
Authors: Metcalfe, Robert and Powdthavee, Nattavudh and Dolan, Paul
Publisher: The economic journal, 121 (550)
ISSN: 1468-0297
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Getting used to it: the adaptive global utility model

Title: Getting used to it: the adaptive global utility model
Authors: Bradford, W. David and Dolan, Paul
Publisher: Journal of health economics, 29 (6). pp. 811-820
ISSN: 0167-6296
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Abstract: This paper expands the standard model of utility maximization to endogenize the ubiquitous phenomenon of adaptation. We assume that total utility is an aggregate function of the utility associated with different domains of life, with relative weights that are optimized according to the effort that the individual expends on producing utility in each domain. Comparative statics from the general maximization problem demonstrate that the traditional Slutsky equation should incorporate an additional response term to account for adaptation processes. Our adaptive global utility maximization model can be used to explain responses to changes in health.

Thinking about it: thoughts about health and valuing QALYs

Title: Thinking about it: thoughts about health and valuing QALYs
Authors: Dolan, Paul
Publisher: Health economics
ISSN: 1057-9230
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Abstract: When valuing health states (e.g. for use in the assessment of health technologies), health economists often ask respondents how many years of life in poor health they would be willing to trade-off in order to live in full health. Problems with preferences of this kind have led to calls for the use of more direct measures of the utility associated with experiencing a health state. The fact remains, however, that individuals are often willing to make large sacrifices in life expectancy to alleviate conditions for which there appears to be a considerable degree of hedonic adaptation. The purpose of this study is to investigate this important discrepancy in more detail. Data from 1173 internet and telephone surveys in the United States suggest that time trade-off responses are related to the frequency and intensity of negative thoughts about health in ways that may not be very well captured by any of the proposed valuation methods.

‘Oops…I did it again’: repeated focusing effects in reports of happiness

Title: ‘Oops…I did it again’: repeated focusing effects in reports of happiness
Authors: Dolan, Paul and Metcalfe, Robert
Publisher: Journal of economic psychology, 31 (4). pp. 732-737
ISSN: 0167-4870
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Abstract: We use an experiment (relating to a major European soccer match) to replicate previous studies that show forecasts of the impact of an event on happiness are often greatly exaggerated. In addition, by randomising respondents into one of two groups (assessing happiness before and after the event or only after), we are also able to show that previously focusing on an event can affect subsequent happiness responses. From a final sample of 309 soccer fans contacted via a social networking site, the happiness ratings of the fans of the losing team who answered before and after the soccer match is a whole point lower (on a 0–10 scale) than similar fans who rated their happiness only after the event. The potential spillover of a focusing effect from one survey to the next has important implications for how we interpret happiness responses from longitudinal surveys.

Accounting for the richness of daily activities

Title: Accounting for the richness of daily activities
Authors: White, Mathew P. and Dolan, Paul
Publisher: Psychological Science, 20 (8). pp. 1000-1008
ISSN: 0956-7976
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Abstract: Serious consideration is being given to the impact of private behavior and public policies on people’s subjective well-being (SWB). A new approach to measuring well-being, the day reconstruction method (DRM), weights the affective component of daily activities by their duration in order to construct temporal aggregates. However, the DRM neglects the potentially important role of thoughts. By adapting this method to include thoughts as well as feelings, we provide perhaps the most comprehensive measure of SWB to date. We show that some activities relatively low in pleasure (e.g., work and time with children) are nonetheless thought of as rewarding and therefore contribute to overall SWB. Such information may be important to policymakers wishing to promote behaviors that are conducive to a broader conception of SWB. In general terms, there are three approaches to assessing how well people’s lives are going. The first focuses on a range of objective indicators (e.g., freedoms and liberties, health and education level; Nussbaum & Sen, 1993). The second concerns the degree to which people are able to satisfy their desires, as (albeit somewhat badly) indexed by income (Griffin, 1986; Harsanyi, 1982). The third focuses on subjective well-being (SWB) and is generally defined as how people think and feel about their lives (Diener, Suh, Lucas, & Smith, 1999). There is considerable debate about how to weight these three kinds of measures, but all are important, especially for policy purposes (Diener, Lucas, Schimmack, & Helliwell, 2008; Diener & Seligman, 2004; Dolan & Kahneman, 2008; Dolan & White, 2007). Rather than address this issue here, we focus on the comprehensiveness of measures of SWB. Much of the research on SWB that has involved large samples has investigated the thinking, or evaluative, component, focusing on judgments of overall life satisfaction (Dolan, Peasgood, & White, 2008). Research concerning the moment-to-moment feelings, or affect, associated with specific activities has largely been confined to smaller samples because of practical considerations (Hektner, Schmidt, & Csikszentmihalyi, 2007). Both approaches have tended to neglect how long people spend in activities associated with these thoughts and feelings, and this is a potentially serious omission because “time is the ultimate finite resource and the question of how well people spend it is a legitimate issue in the study of well-being” (Kahneman, Schkade, Fischler, Krueger, & Krilla, 2008, p. 11). In response to this concern, Kahneman, Krueger, Schkade, Schwarz, and Stone (2004) developed the day reconstruction method (DRM). This approach brings together measures that examine the feelings associated with specific activities (Hektner et al., 2007) with measures of how people spend their time (e.g., Bianchi, Robinson, & Milkie, 2006; Juster & Stafford, 1985). Specifically, it asks people to recall their previous day and divide it into episodes “like a series of scenes in a film”; for each episode, they record its duration, what they were doing, who they were with, and how they were feeling (using adjectives such as “happy” and “anxious”). In this way, the DRM allows subjective assessments of feelings to be weighted by their duration to derive a “hedonic calculus” for each episode and ultimately a person’s affective profile for an entire day. Because information about an entire day can be gathered at one time, responses can be obtained from reasonably large samples. However, the DRM has one major weakness: its focus on feelings. This has produced a number of puzzling and contentious findings. For instance, the data suggest that people spend considerable amounts of time in activities that provide relatively little SWB, such as commuting and spending time with their children. Richer people spend more time commuting, and Kahneman, Krueger, Schkade, Schwarz, and Stone (2006) suggested that this fact partly explains why income has a small effect on feelings. The relatively low levels of positive feelings reported for spending time with children are claimed to be a more accurate reflection of experience than belief-based generic judgments, such as “I enjoy my kids” (Kahneman et al., 2004). However, it is possible that driving to work or playing with one’s children brings SWB benefits that are not captured by measures of feelings alone. These activities may be absorbing (Csikszentmihalyi, 1990), have purpose (Ryff, 1989; Seligman, 2002), connect one to other people (Ryan & Deci, 2001), and contribute to important personal goals (Cantor & Sanderson, 1999). In other words, commuting and spending time with one’s children may be thought of as rewarding and may contribute to one’s SWB every bit as much as some of the more pleasurable activities (like sex and watching TV) appear to. It may be entirely rational and reasonable for people to choose activities that generate relatively low levels of moment-to-moment affect if this outcome is compensated for by positive evaluations. The aim of the research we report here, then, was to provide a more complete account of SWB that captures feelings, thoughts, and their duration.

Interpretations of utility and their implications for the valuation of health.

Title: Interpretations of utility and their implications for the valuation of health.
Authors: Dolan, Paul and Kahneman, Daniel
Publisher: Economic journal, 118 (525). pp. 215-234
ISSN: 1468-0297
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Abstract: The term utility can be interpreted in terms of the hedonic experience of an outcome (experienced utility) or in terms of the preference or desire for that outcome (decision utility). It is this second interpretation that lies at the heart of the methods that economists have developed to value non-market goods, such as health. In this article, we argue that decision utility is unlikely to generate meaningful data on the utility associated with different experiences, and instead economists should look towards developing measures that focus more directly on experienced utility.

Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective well-being

Title: Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective well-being
Authors: Dolan, Paul and Peasgood, Tessa and White, Mathew
Publisher: Journal of economic psychology, 29 (1). pp. 94-122
ISSN: 0167-4870
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Abstract: There is increasing interest in the “economics of happiness”, reflected by the number of articles that are appearing in mainstream economics journals that consider subjective well-being (SWB) and its determinants. This paper provides a detailed review of this literature. It focuses on papers that have been published in economics journals since 1990, as well as some key reviews in psychology and important unpublished working papers. The evidence suggests that poor health, separation, unemployment and lack of social contact are all strongly negatively associated with SWB. However, the review highlights a range of problems in drawing firm conclusions about the causes of SWB; these include some contradictory evidence, concerns over the impact on the findings of potentially unobserved variables and the lack of certainty on the direction of causality. We should be able to address some of these problems as more panel data become available.

Valuing lives and life years: anomalies, implications, and an alternative

Title: Valuing lives and life years: anomalies, implications, and an alternative
Authors: Dolan, Paul and Metcalfe, Robert and Munro, Vicki and Christensen, Michael C.
Publisher: Health economics, policy and law, 3 (03). pp. 277-300
ISSN: 1744-1331
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Abstract: Many government interventions seek to reduce the risk of death. The value of preventing a fatality (VPF) is the monetary amount associated with each statistical death that an intervention can be expected to prevent. The VPF has been estimated using a preference-based approach, either by observingmarket behaviour (revealed preferences) or by asking hypothetical questions that seek to replicate the market (stated preferences). The VPF has been shown to differ across and within these methods. In theory, the VPF should vary according to factors such as baseline and background risk, but, in practice, the estimates vary more by theoretically irrelevant factors, such as the starting point in stated preference studies. This variation makes it difficult to choose one unique VPF. The theoretically irrelevant factors also affect the estimates of the monetary value of a statistical life year and the value of a quality-adjusted life year. In light of such problems, it may be fruitful to focus more research efforts on generating the VPF using an approach based on the subjective well-being associated with different states of the world.

Measuring wellbeing for public policy: preferences or experiences?

Title: Measuring wellbeing for public policy: preferences or experiences?
Authors: Dolan, Paul and Peasgood, Tessa
Publisher: The Journal of legal studies, 37 (S2)
ISSN: 0047-2530
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Abstract: Policy makers seeking to enhance well-being are faced with a choice of possible measures that may offer contrasting views about how well an individual’s life is going. We suggest that choice of well-being measure should be based on three general criteria: (1) the measure must be conceptually appropriate (that is, are we measuring the right sort of concept for public policy?), (2) it must be valid (that is, is it a good measure of that concept?), and (3) it must be empirically useful (that is, does it provide information in a format that can be readily used by policy makers?). Preference-based measures (as represented by income) are compared to experience-based measures (as represented by subjective evaluations of life) according to these criteria. Neither set of measures meets ideal standards, but experiences do fare at least as well as preferences, and subjective evaluations perform much better than income alone as a measure of well-being.

How can measures of subjective well-being be used to inform public policy?

Title:  How can measures of subjective well-being be used to inform public policy?
Authors: Dolan, Paul and White, Mathew P.
Publisher: Perspectives on psychological science, 2 (1). pp. 71-85
ISSN: 1745-6916

Abstract: The debate surrounding the use of subjective measures of well-being for policy purposes has intensified in recent years. Many social scientists are arguing that the time is right for policymakers to extend their traditional focus on material well-being and economic development to include the impact policies have on how people think and feel about their lives. However, policymakers may have many legitimate goals beyond making people happy. In this article, we begin by presenting three archetypal accounts of well-being that policymakers could use to guide policy (mental-state, objective-list, and desire-fulfillment accounts) and discussing some of the normative and methodological limitations of each. We discuss how a subjective (mental-state) approach could be used to aid the achievement of objective-list and desire-fulfillment policy goals. We then consider ways in which a subjective approach may benefit policymakers in its own right, such as by aiding the valuation of hard-to-quantify costs and benefits, providing a standard unit of measurement for comparisons of well-being across domains, and helping to set policy defaults. We conclude with a discussion of some of the remaining measurement issues and general policy implications.

Dynamic well-being: connecting indicators of what people anticipate with indicators of what they experience

Title: Dynamic well-being: connecting indicators of what people anticipate with indicators of what they experience
Authors: Dolan, Paul and White, Mathew
Publisher: Social indicators research, 75 (2). pp. 303-333
ISSN: 0303-8300
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Abstract: There are many indicators of a person’s well-being that could be used for policy purposes. Few would argue that any single indicator of well-being is appropriate in all contexts and, increasingly, social scientists are attempting to integrate the various indicators. Further successful integration depends on understanding how the various indicators of well-being relate to one another in a dynamic way. This paper attempts to connect indicators of what people anticipate to indicators of what is actually experienced and, in so doing, inform the normative debate about the appropriateness of different indicators in policy contexts.