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Innovativeness and Subjective Well-Being

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Abstract

What are the effects of innovativeness on well-being? This paper argues that research on subjective well-being has progressed to a point where measures of subjective well-being (or: happiness) can usefully be employed to assess the welfare effects of innovative change. Based on a discussion of the prospects and pitfalls associated with subjective well-being as welfare measure and benchmark of societal progress, an argument is put forward as to why these measures are particularly well-suited in the context of innovative change. Empirically well-founded and with an explicit dynamic foundation, theories of subjective well-being allow for a nuanced and comprehensive assessment of the effects that innovativeness has on a society. Two evaluation rules, the “life domain evaluation principle” and the “welfare dynamics principle” are suggested to guide such normative assessment.

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Notes

  1. Following the findings of Kahneman et al. (1997), one can conceive of the individual making an effort to more consciously ex post evaluate a temporal interval in retrospective as to its hedonic worth, as is the case with global judgments of life satisfaction. Such a notion of well-being is much more cognitively mediated and thus subject to certain biases and distortions.

  2. The relationship between self-employment and subjective well-being is less clear, which might be explained by the very different reasons for which individuals go into self-employment (Binder and Coad 2012).

  3. They are certainly not meant to replace income-based measures, as these do measure economic or material well-being adequately.

  4. A more nuanced welfare analysis here shows that obesity decreases subjective well-being in individuals when few other individuals are obese. Being in company of many obese individuals (or being low-skilled without much aspirations towards acquiring higher skill-sets), however, leads to less stigma of being obese and hence less decreased well-being. Similarly, smoking affects smokers’ well-being negatively and while most smokers would not quit their habit voluntarily, they express approval of higher tobacco taxes (Gruber and Mullainathan 2005).

  5. This criticism is by far not new, but has gained new impetus in the wake of the recent financial turmoil and the associated attempts at reform (Stiglitz et al. 2009; Michalos 2011).

  6. This finding also qualifies the usually one-sided positive assessment of fostering variety and change persistent in evolutionary economics.

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Acknowledgments

The author gratefully acknowledges funding under the FP7 framework of the European Union within the AEGIS project. I wish to thank Ulrich Witt as well as the participants of the various AEGIS meetings for helpful comments and suggestions. Errors are mine alone.

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  1. Evolutionary Economics Group, Max Planck Institute of Economics, Kahlaische Str.10, 07745, Jena, Germany

    Martin Binder

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Binder, M. Innovativeness and Subjective Well-Being. Soc Indic Res 111, 561–578 (2013). https://doi.org/10.1007/s11205-012-0020-1

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