What do Happiness Data Mean? Theory and Survey Evidence

What utility notion—e.g. flow/lifetime, self/family-centered—do self-reported well-being (SWB) questions measure? Existing applications make different assumptions regarding the (i) life domains, (ii) time horizons, and (iii) other-regarding preferences captured by SWB data. To obtain relevant evidence, we ask survey respondents what they had in mind regarding (i)–(iii) when answering commonly used—life satisfaction, happiness, ladder—and new SWB questions. We find that respondents’ self-reports differ from researchers’ assumptions and differ across SWB questions and sociodemographic groups. At the same time, simple SWB-question wording tweaks are effective in moving self-reports toward desired interpretations. We outline actionable suggestions for SWB researchers. (JEL: D69, D90, I31)

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