Experienced utility as a standard of policy evaluation

Kahneman, Daniel and Sugden, Robert (2005) Experienced utility as a standard of policy evaluation. Environmental and Resource Economics, 32 (1). pp. 161-181. ISSN 0924-6460

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Abstract

This paper explores the possibility of basing economic appraisal on the measurement of experienced utility (utility as hedonic experience) rather than decision utility (utility as a representation of preference). Because of underestimation of the extent of hedonic adaptation to changed circumstances and because of the "focusing illusion" (exaggerating the importance of the current focus of one's attention), individuals' forecasts of experienced utility are subject to systematic error. Such errors induce preference anomalies which the experienced utility approach might circumvent. The "day reconstruction method" of measuring experienced utility is considered as a possible alternative to stated preference methods.

Item Type:	Article
Uncontrolled Keywords:	contingent valuation,day reconstruction method,experienced utility,focusing illusion
Faculty \ School:	Faculty of Social Sciences > School of Economics
UEA Research Groups:	Faculty of Social Sciences > Research Centres > Centre for Competition Policy Faculty of Social Sciences > Research Groups > Economic Theory Faculty of Social Sciences > Research Groups > Behavioural Economics Faculty of Social Sciences > Research Centres > Centre for Behavioural and Experimental Social Sciences
Related URLs:	http://www.scopus.com/inward/record.url?...
Depositing User:	Pure Connector
Date Deposited:	19 Nov 2013 16:15
Last Modified:	18 Apr 2023 23:43
URI:	https://ueaeprints.uea.ac.uk/id/eprint/44525
DOI:	10.1007/s10640-005-6032-4

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