Chapter

Measuring Real Income with Leisure and Household Production

Edited by William Nordhaus

in Measuring the Subjective Well-Being of Nations

Published by University of Chicago Press

Published in print December 2009 | ISBN: 9780226454566
Published online February 2013 | e-ISBN: 9780226454573 | DOI: http://dx.doi.org/10.7208/chicago/9780226454573.003.0006
Measuring Real Income with Leisure and Household Production

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This chapter explains that emotions and subjective experience are not interpersonally comparable. The chapter notes that to be interpersonally comparable a variable must have a uniquely defined zero and a well-defined unit of increment. It is seen that the zero point (and presumably the increment) must be stable across time, people, and countries. The U-index does not require that everyone use the same zero point and same increment. The only requirement is that at a moment in time, whatever zero point and increment people have in mind are applied to their rating of positive and negative emotions. Even if one accepts the view that subjective data are not interpersonally comparable, it is nonetheless the case that subjective reports have predictive power. For example, across-subject differences in self-reported life satisfaction correlate with life expectancy, physiological measures, and job turnover.

Keywords: emotions; subjective experience; zero point; U-index; interpersonally comparable; subjective reports

Chapter.  7790 words.  Illustrated.

Subjects: Econometrics and Mathematical Economics

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