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Happiness Research and Cost-Benefit Analysis

By Matthew D Adler and Eric Posner

Abstract

A growing body of research on happiness or subjective well-being shows, among other things, that people adapt to many injuries more rapidly than is commonly thought, fail to predict the degree of adaptation and hence overestimate the impact of those injuries on their well-being, and, similarly, enjoy small or moderate rather than significant changes in well-being in response to significant changes in income. Some researchers believe that these findings pose a challenge to cost-benefit analysis, and argue that project evaluation decision-procedures based on economic premises should be replaced with procedures that directly maximize subjective well-being. This view turns out to be wrong or, at best, premature. Cost-benefit analysis remains a viable decision-procedure. However, some of the findings in the happiness literature can be used to generate valuations for cost-benefit analysis where current approaches have proven inadequate

Topics: happiness, subjective well-being, SWB, CBA, Economics, Law and Economics, Psychology and Psychiatry, Public Law and Legal Theory, Social Welfare, Economics, Law and Economics, Law and Psychology, Public Law and Legal Theory, Social Welfare Law
Publisher: NELLCO Legal Scholarship Repository
Year: 2007
OAI identifier: oai:lsr.nellco.org:upenn_wps-1171
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