Behavioral economics has shaken the view that individuals have well-defined, consistent and stable preferences. This raises a challenge for welfare economics, which takes as a key postulate that individual preferences should be respected. We agree with Bernheim (2009) and Bernheim and Rangel...

In this paper we examine whether, and how, welfare economics should incorporate the insights from happiness and satisfaction studies. Our main point is that measuring well-being by reported satisfaction levels can come in conáict with individuals judgments about their own lives and that these...