What are we learning from the life satisfaction literature?

Abstract

The recent availability of cross-sectional and longitudinal survey data
\non life satisfaction in a large number of countries gives us the opportunity to verify
\nempirically (and not just to assume) what matters for individuals and what economists
\nand policymakers should take into account when trying to promote personal
\nand societal well-being. We now have ample evidence, generally robust to different
\ncultural backgrounds, on the effects of some important happiness drivers (income,
\nhealth, unemployment, marital status, etc.) which can be considered ‘‘quasi-stylized
\nfacts’’ of happiness. If economic policies, for many obvious reasons, cannot maximize
\nself-declared life satisfaction as such, we are nonetheless learning a lot from
\nthese findings. In particular, results on the relevance of relational goods, on the
\ninflation/unemployment trade-off in terms of welfare and, more in general, on the
\nmeasurement of the shadow value of non-market goods obtained with life satisfaction
\nestimates are conveying relevant information about individual preferences
\nand what is behind utility functions. Such findings suggest that the anthropological
\nreductionism characterizing most economic models can be misleading and that
\ntarget indicators of economic policies have to be refocused if we want to minimize
\nthe distance between economic development and human progress.