Privacy and Data-Based Research

What can we, as users of microdata, formally guarantee to the individuals (or firms) in our dataset, regarding their privacy? We retell a few stories, well-known in data-privacy circles, of failed anonymization attempts in publicly released datasets. We then provide a mostly informal introduction to several ideas from the literature on differential privacy, an active literature in computer science that studies formal approaches to preserving the privacy of individuals in statistical databases. We apply some of its insights to situations routinely faced by applied economists, emphasizing big-data contexts

Is the Endowment Effect a Reference Effect?

This paper is aimed to assess, with two lab experiments, to what extent Kőszegi and Rabin's (2006) model of expectations-based reference-dependent preferences can explain Knetsch's (1989) endowment effect. Departing from past work, we design an experiment that treats the two goods (a mug and a pen) symmetrically in all but in the probabilities with which they are expected to be owned. Thus, our "endowmentless" endowment effect experiment shuts down all alternative mechanisms while leaving expectations the only difference between treatments. We find no evidence that expectations alone can reproduce any of the original effect.

Strategyproofness-Exposing Mechanism Descriptions

A menu description presents a mechanism to player $i$ in two steps. Step (1) uses the reports of other players to describe $i$'s menu: the set of $i$'s potential outcomes. Step (2) uses $i$'s report to select $i$'s favorite outcome from her menu. Can menu descriptions better expose strategyproofness, without sacrificing simplicity? We propose a new, simple menu description of Deferred Acceptance. We prove that -- in contrast with other common matching mechanisms -- this menu description must differ substantially from the corresponding traditional description. We demonstrate, with a lab experiment on two elementary mechanisms, the promise and challenges of menu descriptions

Beyond Happiness and Satisfaction: Toward Well-Being Indices Based on Stated Preference [post-print]

This paper proposes foundations and a methodology for survey-based tracking of well-being. First, we develop a theory in which utility depends on fundamental aspects of well-being, measurable with surveys. Second, drawing from psychologists, philosophers, and economists, we compile a comprehensive list of such aspects. Third, we demonstrate our proposed method for estimating the aspects\u27 relative marginal utilities—a necessary input for constructing an individual-level well-being index—by asking ~4,600 U.S. survey respondents to state their preference between pairs of aspect bundles. We estimate high relative marginal utilities for aspects related to family, health, security, values, freedom, happiness, and life satisfaction

What Do You Think Would Make You Happier? What Do You Think You Would Choose?

Would people choose what they think would maximize their subjective well-being (SWB)? We present survey respondents with hypothetical scenarios and elicit both choice and predicted SWB rankings of two alternatives. While choice and predicted SWB rankings usually coincide in our data, we find systematic reversals. We identify factors—such as predicted sense of purpose, control over one\u27s life, family happiness, and social status—that help explain hypothetical choice controlling for predicted SWB. We explore how our findings vary by SWB measure and by scenario. Our results have implications regarding the use of SWB survey questions as a proxy for utility

Do People Seek to Maximize Happiness? Evidence from New Surveys

Are subjective well-being (SWB) measures a good empirical proxy for utility? We evaluate one necessary assumption: that people’s preferences coincide with what they predict will maximize their SWB. Our method is to present survey respondents with hypothetical scenarios and elicit both choice and predicted SWB rankings of two alternatives. While choice and predicted SWB rankings usually coincide, we find systematic reversals. Furthermore, we identify factors—such as predicted sense of purpose, control over one‘s life, family happiness, and social status—that help explain choice controlling for predicted SWB. We explore how our findings vary with the SWB measure and the choice situation.