The Economics of Happiness

Why we should care about emotional prosperity more than economic growth

Nattavudh (Nick) Powdthavee

London School of Economics and University ofLondon School of Economics and University of Melbourne

I would like to acknowledge that much of this work presented here comes from the research carried out by Andrew J. Oswald, Richard A. Easterlin, Andrew E. Clark, David G. Blanchflower, Rainer Winkelmann, and Daniel Gilbert.

Th d d fi i i f i lThe modern definition of social progress is changingprogress is changing

Economists are now studying mental well‐being

We are drawing closer to psychology and medicine

The conversation starterThe conversation starter…

Easterlin (2004)

The Easterlin ParadoxThe Easterlin Paradox

• As the country becomes significantly richer over time the average happiness does notover time, the average happiness does not seem to rise with it.

• This is the case even when• This is the case even when…

The rich are significantly happier than the poorg y pp p

Japan presents an interestingJapan presents an interesting case studyy

Japan was a poor country in the 1950s/early 1960s, but then1950s/early 1960s, but then experienced unprecedented 

thgrowth.

Richer countries are happier countries.The blue lines show the estimated relationship between income andbetween income and happiness

Japan

Japan was in the middle of the income distribution in the early 1960s and had aJapan was in the middle of the income distribution in the early 1960s, and had a middling level of happiness

So what happened as Japan becameSo what happened as Japan became richer?

d i dBetween 1962 and 1987 Japan experienced unprecedented economic growth, with GNP per capita (in real terms)rising 3.5‐fold: growing from 22 to 77 percent of the United States level in 1962

We might then imagine that Japan would g g pfollow the blue lines above: as Japan became richer, it would become happier.richer, it would become happier.

In fact, happiness remained constant despite Japan’s remarkable growth

What “should” have happened

What did happen

Despite a continuing increase in the l i i l i WWIIreal income per capital since WWII, 

aggregate subjective well‐being inaggregate subjective well being in Japan has remained stagnated 

In this talk I’d like to propose b f ida number of ideas.

#1#1

‘Happiness’ data offer us interesting potential asinteresting potential as proxy-utility dataproxy utility data.

u = u(y, z, ..)u u(y, , )

Regression equationsRegression equations

Mental well-being = f(Age, gender, education level income maritaleducation level, income, marital status, friendship networks,

i )region, year…)

We now know:We now know:

• There is a lot of regularity in these regression-equation patterns, across g q p ,countries and well-being measures.

• Fairly robust to panel estimators and different methods.

• Progress can be made on causality.

#2#2

The next 20 years are likely to see economists work more andsee economists work more and more with physiological and p y ghard-science data.

#3#3

Biomarker data will (slowly) be used more and more inused more and more in economics.

#4#4

Empirically, there are strong relative effects on utility:relative effects on utility:

u = u(y y*)u = u(y, y*)

eg if y* is others’ incomeseg. if y is others incomes.

So........

..how to make whole countries h i ?happier?

How do we measure happiness?

The types of statistical sourcesThe types of statistical sources

G l S i l S f th USAGeneral Social Survey of the USABritish Household Panel Study (BHPS)German Socioeconomic PanelAustralian HILDA PanelEurobarometer SurveysLabour Force Survey from the UKLabour Force Survey from the UKWorld Values SurveysNCDS 1958 cohortNCDS 1958 cohortBRFSS

From the U.S. General Social Survey (sample 

size 40,000 Americans approx.)

“T k ll t th h ld• “Taken all together, how would you say things are these days ‐ wouldsay things are these days  would you say that you are very happy, pretty happy, or not too happy?” 

Typical GHQ mental strain questionsTypical GHQ mental‐strain questions

Have you recently:

Lost much sleep over worry?F lt t tl d t i ?Felt constantly under strain?Felt you could not overcome your difficulties?Been feeling unhappy and depressed?Been feeling unhappy and depressed?Been losing confidence in yourself?Been thinking of yourself as a worthless person?Been thinking of yourself as a worthless person?Been able to enjoy your normal day‐to‐day activities?

An alternative DRM approachAn alternative DRM approach

A t d b D i l K h d hi• A study by Daniel Kahneman and his colleagues on 1,000 working women in Texas (see Kahneman et al, 2003)

• These women were asked to divide the previous day into 15 episodes Theyprevious day into 15 episodes. They were then asked what they were doing in each episode and who were theyin each episode, and who were they doing it with.

Happiness in Different Activities

Happiness while Spending Time with

Different People

The average reported feelings across 1,000 people correspond well with d d b d f ll d d bactivities predicted to be good for us, as well as activities predicted to be

bad for us

Happiness and mental well‐being are of interest in themselves.

But, more broadly, there seem to be deep links bet een mind andbe deep links between mind and bodybody.

Author(s): Ebrecht M, Hextall J, Kirtley LG, Taylor A, Dyson M, Weinman Jy y

PSYCHONEUROENDOCRINOLOGY

V l 29 I 6 P 798Volume: 29 Issue: 6 Pages: 798‐809 Published: JUL 2004

“E bj t i d t d d 4“Every subject received a standard 4mm‐punch biopsy, and the healing progress p p y, g p gwas monitored via high‐resolution ultrasound scanning ”ultrasound scanning.

Ebrecht et al 2004Ebrecht et al 2004

• The overall results showed a significant negative correlation between speed ofnegative correlation between speed of wound healing and GHQ scores (r = ‐.59; 

0 )p < .01)

In other words, happier human beings heal more quicklybeings heal more quickly.

Evidence from NeuroscienceEvidence from Neuroscience

• Positive feelings correspond to brain activity in the left-side of the pre-frontal y pcortex, above and in front of the ear

• Negative feelings correspond to brain activity in the same place in the right side of the brainof the brain

Happy and Sad PicturesHappy and Sad Pictures

The Brain Responses to Two Pictures(MRI S )(MRI Scan)

Source: Richard Davidson, University of Wisconsin

But some general economists have low life satisfaction when they hearlow life‐satisfaction when they hear about this research.

The tradition of economics has beenThe tradition of economics has been to ignore what people say about the quality of their own lives.

Many are opposed to the idea ofMany are opposed to the idea of measuring ‘happiness’.g pp

I always liked the retort:I always liked the retort:

I always liked the retort:I always liked the retort:

If molecules could talk, would physicists refuse to listen?physicists refuse to listen?

A. BlinderA. Blinder

How to please economistsHow to please economists…

We can exploit neo classicalWe can exploit neo‐classical economic theory to assess the yvalidity of well‐being data.

Think not about people but about placesplaces.

Are objective and subjective data on quality‐of‐life correlated? Oswald and Wu, Science,

44

Linking happiness and placesLinking happiness and places

• New data from the Behavioral Risk Factor Surveillance System (BRFSS)Factor Surveillance System (BRFSS) 

• 1.3 million randomly sampled Americans

• 2005 to 2008• 2005 to 2008

• A life‐satisfaction equationA life satisfaction equation

The authors then go to the compensating‐differentials literaturecompensating differentials literature dating back to Adam Smith, Sherwin 

if b kRosen, Jennifer Roback, etc.

The most recent is Gabriel et al 2003.

Gabriel painstakingly takes data onGabriel painstakingly takes data on

P i it ti• Precipitation• Humidity• Heating Degree DaysHeating Degree Days• Cooling Degree Days• Wind Speed• Sunshine• Coast• Inland Water• Inland Water• Federal Land• Visitors to National ParksVisitors to National Parks• Visitors to State Parks• Number of hazardous waste sites       

andand

E i t l R l ti L i• Environmental Regulation Leniency• Commuting Time• Violent Crime RateViolent Crime Rate• Air Quality‐Ozone• Air Quality‐Carbon Monoxide• Student‐teacher ratio• State and local taxes on property, income and sales and 

otherother• State and local expenditures on higher education, public 

welfare, highways, and corrections• Cost‐of‐living   

Then there are 2 ways to measure human well‐being or ‘utility’ acrosshuman well being or  utility  across space.

Subjective and objectiveSubjective and objective

Gabriel’s work assigns a 1 to the state with the highest imputedstate with the highest imputed quality‐of‐life, and 50 to the state q ywith the lowest.

So we need to uncover a negative association in order to find aassociation – in order to find a matchmatch.

One Million Americans’ Life Satisfaction andOne Million Americans  Life Satisfaction and Objective Quality‐of‐Life in 50 States

y = -0 0032082 - 0 0012154x R= 0 60938

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To conclude across US states:To conclude across US states:

There is a match between life‐

ti f ti d th lit f lifsatisfaction scores and the quality of life calculated using (only) non‐subjective g ( y) j

data.

Regression equationsRegression equations

Mental well‐being = f(Age, gender, education level income maritaleducation level, income, marital status, friendship networks, region, p gyear…)  

So what have we learned so farSo what have we learned so far from well‐being research?g

Big effectsBig effects

Unemployment

DivorceDivorce

Marriage

Bereavement

Friendship networksFriendship networks

Health

[No effects from children]

Exogenous shocks and happinessExogenous shocks and happiness

N k l kNew work looks atGenesGenesLottery wins9-11’s effectsDeaths of childrenDeaths of childrenSporting resultsgMovements in air pollution

There is also an intriguingThere is also an intriguing life‐cycle patternlife cycle pattern

The pattern of a typical person’s happinessThe pattern of a typical person s happiness through life

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This holds in various settingsThis holds in various settings

For example, we see the same age pattern in mental health among apattern in mental health among a recent sample of 800,000 UK pcitizens:

[Blanchflower and Oswald Social Science & Medicine 2008][Blanchflower and Oswald, Social Science & Medicine, 2008]

The probability of depression by agep y p y gMales, LFS data set 2004‐2006

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A life satisfaction U‐shape in age also exists in many developing nations

In World Values Survey data, there is a U‐In World Values Survey data, there is a Ushape and it reaches its minimum at:

Brazil 37Brazil  37

China 46

El Salvador 48

Mexico 41Mexico 41

Nigeria 42

iTanzania 46

Japan 49p

Obviously life is a mixture of ups and downs

Much of the recent research follo s people thro h timefollows people through time.

eg. Andrew Clark’s work

The unhappiness from bereavementThe unhappiness from bereavement

Human beings also bounce back from sa disabilitfrom, say, disability.

W k ith A J O ld J l f P bli E i 2008Work with A.J.Oswald, Journal of Public Economics, 2008

Life‐Satisfaction Path of Those Who Entered Disability at Time TLife Satisfaction Path of Those Who Entered Disability at Time T and Remained Disabled in T+1 and T+2

BHPS data 1996‐2005

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H th i d id tHowever, there is a downside to that adaptability (eg. marriage)

Is there income adaptation?Is there income adaptation?

Maybe.

The joy of having higher income may also ffwear off …

Source: Di Tella et al (2008), German Socio‐Economic Panel

And should you invest in a baby?And should you invest in a baby?

Happiness and childrenHappiness and children

But people do not seem to adapt completely to joblessness

O f th l t ti ff tOne of the largest negative effects on our well‐being is unemploymentg p y

20% f th f ll i t l ll b i i• 20% of the fall in mental well‐being is due to the decline in income

• 80% is due to non‐pecuniary things (loss f lf )of self‐esteem, status..).

An important question in a modern societ is the impact ofmodern society is the impact of divorcedivorce.

For an increasingly unhappy married couple, divorce (eventually) makes them happier

Let’s return for a moment to theLet s return for a moment to the Easterlin ParadoxEasterlin Paradox

The relationship between income and well‐being in Japan over 25 years 

The question is why?

We are constrained by humanWe are constrained by human nature:

Easterlin argued:

u = u(y, others’ y)

• But is it right to believe that humans are deeply concerned with relativeare deeply concerned with relative position?p

It has been found thatIt has been found that

Relative‐income variables show upRelative income variables show up consistently in well‐being equations.

Bl hfl O ld J l f P bli E i 2004Blanchflower‐Oswald, Journal of Public Economics 2004

Luttmer, Quarterly Journal of Economics 2005

GDA Brown et al Industrial Relations 2008GDA Brown et al, Industrial Relations 2008

Powdthavee, Journal of Economic Inequality, 2009

Clark and Oswald (JPubEcon 1996). BHPS Data on 5000 Employees

Log income (y) ‐0.02 0.11 ‐0.001

(0.039) (0.050) (0.04)

Log comparison income (y*) ‐‐‐ ‐0.20 ‐‐‐

(0.062)

Log NES comparison income (y**) 0 26Log NES comparison income (y**)   ‐‐‐ ‐‐‐ ‐0.26

(0.073)

“Comparison Income” predicted from a Mincer Earnings equation (note: requires exclusion restrictions to avoid multicollinearity);

“NES comparison income” matched in from another data set by hours of work, and thus avoids identification problems (but assumes reference group defined by hours of work).

Other evidence for relativity effects.

1) This is Denmark) This is enmark

Clark and colleagues use new geo‐referenced data, based on a geographical grid of size , g g p g100*100 meters (i.e. 10 000 square meters, or a hectare) covering the entire countrya hectare) covering the entire country.

Economic Journal, 2009. 

Figure 1S ll i hb h d i th f T t å d H j Tå tSmall neighbourhoods in the area of Taastrupgård, Høje Tåstrup

Source: Damm and Schultz‐Nielsen (2008).

Economic Satisfaction, Income and Rank within Small Neighbourhoods: Panel ResultsNeighbourhoods: Panel Results

Baseline Baseline and Municipality

Baseline and Rank

Ln(HH income) 0 390** 0 390** 0 070*Ln(HH income) 0.390** 0.390** 0.070* (0.021) (0.021) (0.028) Ln(median grid HH income) 0.228** 0.236** 0.634** (0.052) (0.055) (0.057) Ln(median municipality HH income) --- -0 062 ---Ln(median municipality HH income) 0.062 --- (0.156) --- Relative rank in small grid --- --- 1.124** --- --- (0.068) See Neighbours Often -0.019 -0.019 -0.016g (0.016) (0.016) (0.016) Single -0.057* -0.057* 0.025 (0.027) (0.027) (0.028) Health problems dummy -0.023 -0.023 -0.023p y (0.017) (0.017) (0.017) Age dummies (9) Yes Yes Yes Education dummies (6) Yes Yes Yes Socio-Economic Group dummies (3) Yes Yes YesNo. and Ages of children dummies (5) Yes Yes Yes No. Years in Grid dummies (5) Yes Yes Yes Regional dummies (13) Yes Yes Yes Y d i (8) Y Y YYear dummies (8) Yes Yes Yes Observations 33 870 33 870 33 870

People like having a richPeople like having a rich neighbourhood…and being on top of the ‘rank’ pile.

O f l i iOur concerns for relativity are hard wiredhard‐wired...

Armin Falk et alArmin Falk et al

While being scanned in adjacent MRI scanners, pairs of subjects had toscanners, pairs of subjects had to perform a task with monetary rewards ffor correct answers. 

Variation in the comparison subject's payment affected blood oxygenationpayment affected blood oxygenation level‐dependent (BOLD) responses in h l ithe ventral striatum. 

This brain region is engaged in the registration of primary rewards.

Falk et al in Science and JPubEconFalk et al in Science and JPubEcon

• “The mere fact of outperforming the other subject positively affected reward‐other subject positively affected rewardrelated brain areas.”

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There is even laboratory evidence of relative income effectsof relative income effects

“Are people willing to pay to reduce th ’ i ?”others’ income?”

Zizzo, D.J., Oswald, A.J. (2001).

People are willing to ‘burn’ other people’s money – mostly those who are richer than y ythey are – by paying some of their own money to do somoney to do so

Overall, in humansOverall, in humans

‘Relativity’ effects seem strong.

So how does it explain the Easterlin Paradox?So how does it explain the Easterlin Paradox?

The rich are happier than theThe rich are happier than the poor partly because of thepoor partly because of the differences in status

k fBut status‐seeking is often a zero‐sum gamesum game

For every winner, there’s a loser

So as we’ve become richer, allSo as we ve become richer, all we are doing is this…

But people don’t seem to know thisBut people don t seem to know this (or at least act as if they don’t)

“Money doesn’t buy happiness – but I’d rather cry in my Ferrari than on my bike” y y y

Anonymous

Would you be happier if you were richer?Would you be happier if you were richer?

• People believe that the rich spend significantly less time in bad mood

Th A i di h l• The average American predict that people with income below $20,000 p.a. would spend 58% of their time in bad mood, compared with 26% for those with income abovewith 26% for those with income above $100,000 p.a.

The actual percentages were 32%p gfor people with income below $$20,000 p.a. and 20% with income above $100 000 p aabove $100,000 p.a.

Kahneman and co. (2004), Science

How time is typically spent by people of different income groups: Men

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How time is typically spent by people of different income groups: Women

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<$20,000 $20,000-99,999 $100,000+

People with lower income typically p yp yspend more time engaging in passive leisure activities than those with higherleisure activities than those with higher income, while the latter spend significantly more time working and commuting – both of which arecommuting – both of which are associated with higher tension and stress

Yet when we think about being rich, we are probably tempted to think that weare probably tempted to think that we would be spending significantly more time in passive leisure such as watching a large‐screen plasma TV or playing aa large screen plasma TV or playing a bit of golf

Psychologists refer to thisPsychologists refer to this tendency as Focusing Illusion

Commuting is a stress thatCommuting is a stress that doesn’t paydoesn t pay

Many people around the globe are willing to accept the burden of having toto accept the burden of having to commute to work in exchange for 

thi b tt b it h lsomething better – be it a house, salary or school

Yet a study by Bruno Frey and Alois Stutzer shows that an average commuter who has to travel onecommuter who has to travel one hour, one way, to work has to earn 40%more than his current salary to b j t ti fi d ith lifbe just as satisfied with life as a non‐commutercommuter

Most people suffer from focusing illusion and do not realise itillusion and do not realise it…

But what if they did, could they il h th i b h i ?easily change their behaviours?

Consider the following two choices: 

Choice A: a pay rise of $10 000Choice A: a pay rise of $10,000

OR

Choice B: 20 extra days of vacation

Which one would you prefer?

On average people seem to beOn average, people seem to be indifferent between the two 

choices

But what about this one?

Choice A: no gain and no loss

OR

Choice B: a raise of $10,000 but 20 days lessChoice B: a raise of $10,000 but 20 days less of vacation

Which one would you prefer?y p f

People’s taste is not fixed; they actually vary significantly by reference pointreference point

Kahneman, D., Tversky, A. 

I h d f l ’In other words, some of people’s behaviours can be hard to shiftbehaviours can be hard to shift

So what can a government do to improve the well‐being of theirimprove the well being of their people?

The first suggestion is probably obvious…The first suggestion is probably obvious…

We need to start measuring the right thing

Stiglitz Report 2009Stiglitz Report 2009www.stiglitz‐sen‐fitoussi.frwww.stiglitz sen fitoussi.fr

The Stiglitz Commission ReportThe Stiglitz Commission Report

d t hift f h i fadvocates a shift of emphasis from a “production‐oriented” measurement psystem … toward broader measures of social progresssocial progress.

“Emphasis on growth is misguided”

“Beyond GDP”Beyond GDP

“Measuring what matters”

Happiness is the new GDPHappiness is the new GDP

Smile, and the economy smiles with you. Factory workers in Macedonia., y y y

Stiglitz et al:Stiglitz et al:

ffOfficial statistics should blend objective and subjective well‐beingobjective and subjective well being data

d f b h b dRecommendation 10: Measures of both objective and subjective well‐being provide key information about people’s quality of life Statistical offices shouldpeople s quality of life. Statistical offices should incorporate questions to capture people’s life evaluations hedonic experiences and priorities inevaluations, hedonic experiences and priorities in their own survey.

The second is to engage in more in‐The second is to engage in more in‐house research to the causal determinants of well‐being of the people in Thailandpeople in Thailand

This may involve collecting their own cross‐section and longitudinal surveyscross‐section and longitudinal surveys of well‐being, field experiments, etc.

Much of the research has beenMuch of the research has been carried out in the West

F ll k lt l diffFor all we know, cultural differences may play a very important role inmay play a very important role in determining how people report their well‐being in Thailand

But if policy makers are unconvinced by ‘subjective’unconvinced by ‘subjective’ measures of well‐being, what about g,more objective measures of well‐b i i l li l?being as a potential policy goal?

An important border is between happiness and medicine

• Is it possible that we could find physiological correlates with humanphysiological correlates with human well-being?

• Perhaps to broaden the standard• Perhaps to broaden the standard policy goal of GDP?

We are studying mental well-being and physiological data on aand physiological data on a random sample of 100,000 English

iticitizens.

We are interested in equations forWe are interested in equations for

Heart rate

S t li bl dSystolic blood pressure

Diastolic blood pressureDiastolic blood pressure

C-reactive proteinC reactive protein

Fibrinogeng

Blood pressure = cardiac outputX peripheral resistanceX peripheral resistance.

Systolic pressure is the force of blood in the arteries as the heartblood in the arteries as the heart beats. It is shown as the top

b i bl dnumber in a blood pressure reading. High blood pressure is ead g g b ood p essu e s140 and higher for systolic press repressure.

Diastolic pressure is the force of blood in the arteries as the heartblood in the arteries as the heart relaxes between beats. It's shown

th b tt b i bl das the bottom number in a blood pressure reading.p essu e ead g

C-reactive protein (CRP) is a protein found in the blood, the levels of which ,rise in response to inflammation (i.e. C-reactive protein is an acute-phasereactive protein is an acute phase protein). It is synthesized in the liver.

Fibrinogen is a protein that plays a key role in blood clotting. Fibrinogen is a sticky, fibrous g g ycoagulant in the blood that increases the risk of experiencing one of the leading causes ofof experiencing one of the leading causes of death and disability ‐ stroke.

Why would we care?

It is known that heart rate rises under stressrises under stress.

• Nicolas Troubat et al (2009) European Journal of AppliedEuropean Journal of Applied Physiology

20 chess players international20 chess players – international and national-level players. They all y yplayed against a computer.

The computer standard was deliberately set one leveldeliberately set one level higher.g

The computer standard was deliberately set one leveldeliberately set one level higher.g

So all the players lost against th tthe computer.

What happened?What happened?

• Average heart-rate rose 11 beats a minuteminute

• On average, players used up 140 calories playing the game

Overall the physiological changes• Overall, the physiological changes were “similar…those … in moderate physical exercise”.

QuestionQuestion

Could physiologicalbi k bmeasures -- biomarkers -- be

used as proxies for well-used as proxies for well-being?g

Or maybe in the long run in western society we can blend well-western society we can blend wellbeing survey responses with bi k d tbiomarker data.

For exampleFor example

Cortisol is produced by the adrenal gland in the zona fasciculata, the g ,second of three layers comprising the outer adrenal cortex This release isouter adrenal cortex. This release is controlled by the hypothalamus, a part of the brainof the brain.

Main functions of cortisol in the body

• increasing blood sugar throughincreasing blood sugar through glycogenolysis and reduction of glucose uptake into cellsglucose uptake into cells.

• suppressing the immune system

• aiding in fat, protein, and carbohydrate metabolismmetabolism

The amount of cortisol present in the blood undergoes diurnal variation; the g ;level peaks in the early morning (approximately 8 am) and reaches its(approximately 8 am) and reaches its lowest level at about midnight-4 am, or three to five hours after the onset ofthree to five hours after the onset of sleep.

Important work by Andrew Steptoe of UCL:Steptoe of UCL:

Whitehall II data

Salivary cortisol (Steptoe data)Salivary cortisol (Steptoe data)

10P 009

9

P = .009

7

8

nm

ol/l

6

7

51 Low 2 3 4 5 High

H i i ilHappiness quintiles8 samples (08:00 – 22:30)Adjusted for gender, age, occupational grade, smoking, bmi, and GHQ

Some of the latest work:Some of the latest work:

A d O ld (W i k) d D idAndrew Oswald (Warwick) and David Blanchflower (Dartmouth)

Statistical links between theStatistical links between the heart and happiness.

To cliniciansTo clinicians

High blood pressure is potentially a sign of mentalpotentially a sign of mental strain and low well-beingstrain and low well being

But how about high blood pressure as a nationalpressure as a nationalmeasure of well-being?measure of well being?

Across nations hypertension andAcross nations, hypertension and happiness are inversely correlated

(Blanchflower and Oswald, 2008 Journal of Health Economics)( , )

Figure 2.The Inverse Correlation Between Hypertension and Life

Satisfaction: 16 European Nations Aggregated into Quartiles

40

50

th th

eir

live

s

30

IrelandDenmarkN'LandsSweden

SpainFranceLns

ver

y sa

tisf

ied

wit

10

20LuxUK Austria

ItalyBelgiumGreece

E. GermanyW. GermanyPortugalFinlander

cent

age

of c

itiz

en

0 Countries in the Countries in the lowest quartile highest quartile of blood-pressure of blood-pressure

Finland

Pe

p p

Researchers need to understand these mind bodyunderstand these mind-body interconnections betterinterconnections better.

• To recap...

#1#1

‘Happiness’ data offer us interesting potential asinteresting potential as proxy-utility dataproxy utility data.

u = u(y, z, ..)u u(y, , )

#2#2

The next 20 years are likely to see economists work more andsee economists work more and more with physiological and p y ghard-science data.

#3#3

Biomarker data will (slowly) be used more and more inused more and more in economics.

#4#4

Empirically, there are strong relative effects on utility:relative effects on utility:

u = u(y y*)u = u(y, y*)

eg if y* is others’ incomeseg. if y is others incomes.

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