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New developments with the pitfalls and the promise of subjective welfare

Jed Friedman's picture

Consumption or income, valued at prevailing market prices, is the workhorse metric of human welfare in economic analysis; poverty is almost universally defined in these terms, and the growth of national economies measured as such. Yet for almost as long as economic analysis has utilized these measures, various shortcomings have been noted in the ability of these constructs to comprehensively capture welfare. One example – these measures can’t fully account for access to non-market goods. More famously, with Amartya Sen’s emphasis on human functionings and capabilities, these measures may not fully capture an individual’s ability to achieve and exhibit agency.

In part inspired by this view that people intrinsically value capabilities and functionings as opposed to money-metric measures per se, a burgeoning sub-field of poverty research has proposed various measures of subjective, or self-reported, well-being (SWB). SWB is widely seen as multi-dimensional and unable to be captured in only one question. Hence there are numerous approaches to the measure of SWB, most notably combinations of evaluative/cognitive approaches, such those that inquire about life satisfaction, and hedonic/affective approaches such as those asking about happiness.
I think it’s uncontroversial if I claim that the field of economics is of mixed minds about the usefulness of SWB: these measures hold some promise for comprehensive welfare assessment yet there are various interpretive challenges. I’ve blogged about some of these challenges in the past. Most concerning is the worry that salient characteristics such as gender and education, which naturally vary in any population, influence how SWB questions are understood and reported, thus complicating cross-group comparisons. Now two recent papers have made advances in the field and, taken together, highlight both the pitfalls and the promise of SWB.

227 studies later, what actually works to improve learning in developing countries?

David Evans's picture
Yesterday we talked about some of the limitations in systematic reviews of educational research, and how many of the reviews have – on the face of them – varying recommendations. The main recommendations as to what works (principally drawn from the abstracts and introductions) are in the figure below.

Blog links February 27th: What counts as a nudge, being efficient, debiasing, and more…

David McKenzie's picture
  • How to be efficient – excellent advice from Dan Ariely In particular I liked “A calendar should be a record of anything that needs to get done — not merely of interruptions like meetings and calls.” and “frequent email checks can temporarily lower your intelligence more than being stoned”

Why is Difference-in-Difference Estimation Still so Popular in Experimental Analysis?

Berk Ozler's picture
David McKenzie pops out from under many empirical questions that come up in my research projects, which has not yet ceased to be surprising every time it happens, despite his prolific production. The last time it happened was a teachable moment for me, so I thought I’d share it in a short post that fits nicely under our “Tools of the Trade” tag.

Blog links February 20: understandability, the replication debate continues, thoughts on the “Africa problem in economics”, and more…

David McKenzie's picture
  • A third paper in 3ie’s internal replication series is now out – along with a response from the authors (Stefan Dercon and co-authors). The author’s response is interesting for some of the issues with such replication exercises that it raises “At the outset of this exercise, we were enthusiastic, but possibly naive participants. At its end, we find it hard to shake the feeling that an activity that began as one narrowly focused on pure replication morphed – once our original findings were confirmed (save for a very minor programming error that we willingly confess to) - into a 14 month effort to find an alternative method/structure of researching the problem that would yield different results.” (See also Berk’s posts on the previous replications).
  • On the Let’s Talk Development blog, Emanuela Galasso reflects on the Chile Solidario program and how social programs can move from social protection to productive inclusion.
  • From Cornell’s Economics that really matters blog – conducting fieldwork in a conflict zone in Mexico.

Evaluating an Argentine regional tourism policy using synthetic controls: tan linda que enamora?

David McKenzie's picture
In 2003, the Argentine province of Salta launched a new tourism development policy with the explicit objective of boosting regional development. This included improving tourism and transport infrastructure, restoring historical and cultural heritage areas, tax credits for the construction and remodeling of hotels, and a major promotion campaign at the national and international levels.

Weekly links February 13: Cricket, Harry Potter, vaccine initiatives, and more…

David McKenzie's picture

Measuring Yields from Space

Florence Kondylis's picture

This post is co-authored with Marshall Burke.
One morning last August a number of economists, engineers, Silicon Valley players, donors, and policymakers met on the UC-Berkeley campus to discuss frontier topics in measuring development outcomes. The idea behind the event was not that economists could ask experts to create measurement tools they need, but instead that measurement scientists could tell economists about what was going on at the frontier of measuring development-related outcomes. Instead of waiting for pilot results, we decided to blog about some of these ideas and get inputs from Development Impact readers. In this series, we start with recent progress on measuring (“remote-sensing”) agricultural crop yields from space.