Can Marginal Rates of Substitution Be Inferred from Happiness Data? Evidence from Residency Choices
43 Pages Posted: 21 Feb 2013 Last revised: 27 Feb 2014
Date Written: February 25, 2014
We survey 561 students from U.S. medical schools shortly after they submit choice rankings over residencies to the National Resident Matching Program. We elicit (a) these choice rankings, (b) anticipated subjective well-being (SWB) rankings, and (c) expected features of the residencies (such as prestige). We find substantial differences between choice and anticipated-SWB rankings in the implied tradeoffs between residency features. In our data, evaluative SWB measures (life satisfaction and Cantril’s ladder) imply tradeoffs closer to choice than does affective happiness (even time-integrated), and as close as do multi-measure SWB indices. We discuss implications for using SWB data in applied work.
Keywords: happiness, life satisfaction, subjective well-being, preference, utility, revealed preference, marginal rate of substitution
JEL Classification: C81, D03, D69
Suggested Citation: Suggested Citation