There is no consensus on how to infer welfare from inconsistent choices. We argue that theorists must be explicit about the values they endorse to characterize individual welfare. After formalizing a set of values and their relationship with context-independent choices, we review the literature and discuss the advantages and drawbacks of each approach. We demonstrate that defining welfare a priori may violate normative individualism, arguably the most desirable value to maintain. To uphold this value while addressing individuals’ errors, we propose a weaker version of consumer sovereignty, which we label ‘consumer autonomy’.

Organisational measures to support employees who are experiencing family and domestic violence (FDV) are increasingly seen as an important policy response to mitigate the consequences of such violence and promote gender equality. However, little is known about the costs to employers of providing such workplace policies. This paper assesses the costs and benefits to Australian employers of providing 10 days of paid FDV leave to employees experiencing such violence. We draw on a case study based on the evidence presented to the Fair Work Commission which contributed to their 2023 enactment that modern award wages should include 10 days of paid FDV leave. Using a bottom-up approach and utilising individual-level data from the Australian Bureau of Statistics and Household, Income and Labour Dynamics in Australia Survey, our estimates reveal that the total annual cost to employers of providing an entitlement of 10 days of paid FDV leave to award-covered employees is between $13.1 million and $34.3 million. Our analysis highlights the role of robust economic analysis in generating evidence for policy change and offers an approach that can be applied in evaluating costs and benefits of other employer initiatives of similar nature.

This study examines the impact of temperature on human well-being using approximately 80 million geo-tagged tweets from Argentina spanning 2017–2022. Employing text mining techniques, we derive two quantitative estimators: sentiments and a social media aggression index. The Hedonometer Index measures overall sentiment, distinguishing positive and negative ones, while social media aggressive behavior is assessed through profanity frequency. Non-linear fixed effects panel regressions reveal a notable negative causal association between extreme heat and the overall sentiment index, with a weaker relationship found for extreme cold. Our results highlight that, while heat strongly influences negative sentiments, it has no significant effect on positive ones. Consequently, the overall impact of extremely high temperatures on sentiment is predominantly driven by heightened negative feelings in hot conditions. Moreover, our profanity index exhibits a similar pattern to that observed for negative sentiments.

Conventional benefit–cost analysis plays an important role in informing policy decisions, encouraging systematic investigation of the positive and negative impacts of alternative policies. It is based on strong normative assumptions, however. To measure individual wellbeing, the conventional approach relies on individuals’ willingness to exchange their income for the outcomes they experience. To measure societal welfare, it relies on simple aggregation of these values across individuals. In this “Ethics and Benefit–Cost Analysis” special issue, we explore alternative conceptions of individual and societal welfare, their application, and the implications, from both practical and ethical perspectives.

Buying lottery tickets is not a rational investment from a financial point of view. Yet, the majority of people participate at least once a year in a lottery. We conducted a field experiment to increase understanding of lottery participation. Using representative data for the Netherlands, we find that lottery participation increased the happiness of participants before the draw. Winning a small prize had no effect on happiness. Our results indicate that people may not only care about the outcomes of the lottery, but also enjoy the game. Accordingly, we conclude that lottery participation has a utility value in itself and part of the utility of a lottery ticket is consumed before the draw.

John Stuart Mill claimed that “men do not desire merely to be rich, but richer than other men.” Are people made happy by being richer than others? Or are people made happy by favorable comparisons to others more generally, and being richer is merely a proxy for this ineffable relativity? We conduct an online experiment absent choice in which we measure subjective well-being (SWB) before and after an exogenous shock that reveals to subjects how many experimental points they and another subject receive, and whether or not points are worth money. We find that subjects are made significantly happier when they receive monetized rather than non-monetized points, suggesting money is valued more than the points it represents. In contrast, subjects are made equally unhappy when they receive fewer monetized points as when they receive fewer non-monetized points than others, suggesting relative money is not valued more than the relative points it represents. We find no evidence that subjects are made happier by being “richer” than others (i.e., by receiving more points—either monetized or non-monetized—than others). Subgroup analyses reveal women are made unhappier (than men) by being “richer” and “poorer” than others, and conservatives are made unhappier (than progressives) by being “poorer” than others. Our experimental-SWB approach is easy to administer and may complement choice-based tasks in future experiments to better estimate preference parameters.

We perform an experiment which provides a laboratory replica of some important features of the welfare state. In the experiment, all individuals in a group decide whether to make a costly effort, which produces a random (independent) outcome for each one of them. The group members then vote on whether to redistribute the resulting and commonly known total sum of earnings equally amongst themselves. This game has two equilibria, if played once. In one of them, all players make effort and there is little redistribution. In the other one, there is no effort and nothing to redistribute. A solution to the repeated game allows for redistribution and high effort, sustained by the threat to revert to the worst of these equilibria. Our results show that redistribution with high effort is not sustainable. The main reason for the absence of redistribution is that rich agents do not act differently depending on whether the poor have worked hard or not. The equilibrium in which redistribution may be sustained by the threat of punishing the poor if they do not exert effort is not observed in the experiment. Thus, the explanation of the behavior of the subjects lies in Hobbes, not in Rousseau.

Social media permeates many aspects of our lives, including how we connect with others, where we get our news and how we spend our time. Yet, we know little about the economic effects for users. In 2017, we ran a large field experiment with over 1765 individuals to document the value of Facebook to users and its causal effect on news, well-being and daily activities. Participants reveal how much they value one week of Facebook usage and are then randomly assigned to a validated Facebook restriction or normal use. One week of Facebook is worth $67. Those who are off Facebook for one week reduce news consumption, are less likely to recognize politically-skewed news stories, report being less depressed and engage in healthier activities. These results are strongest for men. Our results further suggest that, after the restriction, Facebook’s value increases, consistent with information loss or that using Facebook may be addictive.

A crucial first step in helping consumers improve their financial lives is understanding their financial circumstances and well-being. The Financial Well-Being (FWB) scale measures a consumer’s subjective well-being related to aspects of their financial circumstances. It is available in standard-length (10-item) and abbreviated (5-item) versions, but no research has compared how completing either version may alter consumers’ responses. Notably, the 5-item scale includes a higher share of reverse-coded (i.e., negatively framed) items. We hypothesize that the difference in item framing between scale versions influences participants’ feelings about their financial situation, predicting that completing the 5-item FWB scale will result in more negative responses compared to completing the 10-item FWB scale. To test this hypothesis, we implement a randomized survey experiment using the Understanding America Study. In our experiment with nearly 6,000 participants, we find that completing the 5-item versus the 10-item FWB scale reduces FWB scores (average decline in the 5-item FWB score of 0.9 points, 95% CI [–1.552, –0.249]), and increases the share with a “low” 5-item FWB score by 5.0 percentage points, 95% CI [0.028, 0.071]), responses to individual scale items, and self-rated FWB. This pattern is strongest among lower-income respondents (average decline in FWB score of 2.3 points, 95% CI [–3.385, –1.171] and increases the share with a “low” 5-item FWB score by 8.1 percentage points, 95% CI [0.041, 0.121]). These findings highlight that FWB scale choice can have unexpected consequences. We discuss the implications for research on FWB and on the measurement of well-being more broadly.

We use childhood exposure to disasters as a natural experiment inducing variations in adulthood outcomes. Following the fetal origin hypothesis, we hypothesize that children from households with greater famine exposure will have poorer health outcomes. Employing a unique dataset from Bangladesh, we test this hypothesis for the 1974–75 famine that was largely caused by increased differences between the price of coarse rice and agricultural wages, together with the lack of entitlement to foodgrains for daily wage earners. People from northern regions of Bangladesh were unequally affected by this famine that spanned several months in 1974 and 1975. We find that children surviving the 1974–75 famine have lower health outcomes during their adulthood. Due to the long-lasting effects of such adverse events and their apparent human capital and growth implications, it is important to enact and enforce public policies aimed at ameliorating the immediate harms of such events through helping the poor.

Nozick’s ‘utility monster’ is often regarded as impossible, because one life cannot be better than a large number of other lives. Against that view, I propose a purely marginalist account of utility monster defining the monster by a higher sensitivity of well-being to resources (instead of a larger total well-being), and I introduce the concept of collective utility monster to account for resource predation by a group. Since longevity strengthens the sensitivity of well-being to resources, large groups of long-lived persons may, if their longevity advantage is sufficiently strong, fall under the concept of collective utility monster, against moral intuition.

This study explores the relationship between maternal working hours and a child's emotional well-being using data from the UK Millennium Cohort Study. Child well-being is assessed through self-reported happiness and a well-being index that includes concerns, temperament, bullying, and behaviour. Results show a positive association between maternal employment and child well-being, supported by factor analysis combining child, mother, and teacher reports. The association remains consistent across income levels and is unaffected by commuting time or cohabitation status. These findings highlight the importance of maternal employment and contextual factors in shaping child well-being.

This study utilises panel data of 46 countries from 2005 to 2019 to examine the impact of digital service trade (DST) on inclusive growth. Inclusive growth is a growth model that promotes economic growth and development, while also building social equity and inclusiveness and balancing environmental sustainability. The findings indicate that a nation’s DST development significantly fosters domestic economic growth and development, specifically through its employment enhancement effect. DST substantially promotes social equity and inclusiveness, mainly through the inclusive innovation effect. However, DST is also found to increase carbon emissions, impeding environmentally sustainable growth, specifically via the energy demand effect. Hence, DST exerts diverse impacts on different facets of inclusiveness. The study also reveals heterogeneity in the effects of DST on the three aspects of inclusive growth related to trade’s import–export dynamics, income levels, and DST barrier intensities. This paper contributes to and refines the body of research on the relationship between DST and inclusive growth. It offers policy suggestions for crafting more open and mutually beneficial DST policies to foster social equity and inclusive global trade.

Work-related stress is a major occupational health and safety (OHS) issue that has industrial relations origins. Aside from the moral and human rights imperatives to improve the corporate climate for worker psychological health (as per psychosocial safety climate, PSC), there are strong economic costs for not doing so. PSC refers to worker perceptions of the corporate safety system to protect and promote workers’ psychological health and wellbeing. It is a leading indicator of working conditions, which in turn affect workers’ health and work engagement. In this study, we estimate the attributable economic cost of low PSC due to sickness absence and turnover. Data were collected from a multinational company using survey at Time 1 (T1) and objective company data (i.e., sickness absence and turnover) after one year (T2). Using regression analysis and a matched sample of 617 responses, PSC was negatively related to future sickness absence. A binomial logistic regression with 1268 respondents (i.e., all responses at T1) showed that PSC was negatively related to future voluntary turnover. An economic analysis suggests that improving OHS via PSC could save an organisation with 5000 employees USD 0.6–2.7 million per year. Building PSC to protect and promote workers’ psychological health is a likely economic saving on organisational productivity.

There is a need to value health technologies in a way that accommodates their broader economic impacts and competing approaches for doing so have emerged. The Pareto principle (PP) requires policymakers to resolve intrapersonal trade-offs by deferring to the preferences of the individuals facing those trade-offs. Many broad value frameworks such as cost-utility analysis and its extensions, health-centric multicriteria decision analysis, and poverty-free life expectancy are not sufficiently deferential to these preferences, violating PP. I propose using the health-augmented lifecycle model (HALM) to value health technologies in a way that flexibly incorporates the interactions among health and economic factors – specifically mortality and morbidity risks, paid and unpaid work, consumption, leisure, and public and private transfer inflows and outflows--over the life course. It relies on individual preferences, satisfying PP. It is compatible with cost-benefit analysis, social welfare functions, and equivalent income approaches. I calibrate the HALM for the US setting and apply it to a pediatric vaccine.

While the Chinese government's stated position is to support religious freedom, the Chinese Communist Party (CCP) is officially atheist. Individuals who profess faith are typically unable to join and members who practice a religion face expulsion and a loss of benefits. This paper analyzes the extent to which the CCP's policies regarding religion may influence religious identification over the life cycle in China. To do so, we contrast changes in religious affiliation before and after retirement for CCP members and non-CCP members. We find a significant increase of religious activities and religious faith in CCP members after retirement – suggesting: (1) people's acknowledgment of religious belief is significantly influenced by CCP regulations and (2) the biggest influence from a material benefits perspective occurs for those CCP members employed in the Chinese government system.

The consequences of legal access to medical marijuana for individuals' well-being are controversially assessed. We contribute to the discussion by evaluating the impact of the introduction of medical marijuana laws across US states on self-reported mental health considering different motives for cannabis consumption. Our analysis is based on BRFSS survey data from close to eight million respondents between 1993 and 2018 that we combine with information from the NSDUH to estimate individual consumption propensities. We find that eased access to marijuana through medical marijuana laws reduce the reported number of days with poor mental health for individuals with a high propensity to consume marijuana for medical purposes and for those individuals who likely suffer from frequent pain.

We evaluate the impact of climate shocks on the well-being of farmer households in a Small Island Developing State in the Pacific, the Solomon Islands. We find that both subjective (self-assessed exposure to climate shocks) and objective (number of past dry spells) indicators of environmental stress significantly reduce the quality of life among households. Household well-being is more severely affected for farmers living in poor dwellings (e.g., those with thatched roofs signaling shelters less resistant to environmental shocks), with below median income or durable assets, living in isolated areas and not being members of agricultural associations. Furthermore, households affected by climate shocks experience a significantly higher proportion of nutritional problems. These findings support the hypothesis of a strong correlation between climate shocks, household well-being and nutritional status, advocating for the relevance of global climate adaptation policies such as loss and damage funds, as well as prevention strategies.

We propose a methodology for normative evaluation when preferences are context-dependent. We offer a precise definition of context-dependence and formulate a normative criterion of self-determination, according to which one situation is better than another if individuals are aware of more potential contexts of a choice problem. We provide two interpretations of our normative approach: an extension of Sugden’s opportunity criterion and an application of Sen’s positional views in his theory of justice. Our proposition is consistent with Muldoon’s and Gaus’ approaches of public reason in social contract theory, which account for the diversity of perspectives in non-ideal worlds.

We examine the effects of the postulated metric on the measurement of well-being, by comparing, in the (income, lifetime) space, two indexes: the equivalent income index and the equivalent lifetime index. The conditions under which the equivalent lifetime index exists are more restrictive than the ones under which the equivalent income index exists, but it is possible to define an alternative equivalent lifetime index, based on two reference income levels, for which the non-existence problem is less acute. Those indexes are also shown to satisfy different properties concerning interpersonal well-being comparisons, which can lead to contradictory rankings. While those incompatibilities arise under distinct indifference maps, we also explore the effects of the metric while relying on a unique indifference map, and show that, even in that case, the postulated metric matters for the measurement of well-being.