Can marginal rates of substitution be inferred from happiness data? Evidence from residency choices

Daniel J. Benjamin*, Ori Heffetz, Miles S. Kimball, Alex Rees-Jones

*Corresponding author for this work

Research output: Contribution to journalReview articlepeer-review

74 Scopus citations

Abstract

We survey 561 students from US medical schools shortly after they submit choice rankings over residencies to the National Resident Matching Program. We elicit (i ) these choice rankings, (ii ) anticipated subjective well-being (SWB) rankings, and (iii ) expected features of the residencies (such as prestige). We find substantial differences between choice and anticipated-SWB rankings in the implied trade-offs between residency features. In our data, evaluative SWB measures (life satisfaction and Cantril's Ladder) imply trade-offs closer to choice than does affective happiness (even time- integrated), and as close as do multimeasure SWB indices. We discuss implications for using SWB data in applied work.

Original languageEnglish
Pages (from-to)3498-3528
Number of pages31
JournalAmerican Economic Review
Volume104
Issue number11
DOIs
StatePublished - 1 Nov 2014
Externally publishedYes

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