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Can Marginal Rates of Substitution Be Inferred from Happiness Data? Evidence from Residency Choices

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  • Daniel J. Benjamin
  • Ori Heffetz
  • Miles S. Kimball
  • Alex Rees-Jones

Abstract

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.

Suggested Citation

  • Daniel J. Benjamin & Ori Heffetz & Miles S. Kimball & Alex Rees-Jones, 2013. "Can Marginal Rates of Substitution Be Inferred from Happiness Data? Evidence from Residency Choices," NBER Working Papers 18927, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:18927
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    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D69 - Microeconomics - - Welfare Economics - - - Other

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