This paper addresses an important policy question: who gets the largest utility gain from income and does the tax system adequately reflect this? We address this question by using Australian panel data and taking life satisfaction as a proxy for utility, allowing us to identify the marginal...

In this paper we compare three theories of utility formation: prospect theory, regret theory, and a combination which additionally allows for direct utility flows from positive expectations. We then test which of these theories best explains actual connections between health and welfare over...