Neoclassical economic theory rules out systematic errors in consumption choice. According to the basic view, individuals know what they choose. They are able to predict how much utility an activity or a good produces for them now and in the future and they can maximize their utility. This...

Standard economic analysis assumes that people make choices that maximize their utility. Yet both popular discourse and other fields assume that people sometimes fail to make optimal choices and thus adversely affect their own happiness. Most social sciences thus frequently describe some...

This article comments on the role of empirical subjective well-being research in public policy within a constitutional, procedural perspective of government and state. It rejects the idea that, based on the promises of the measurement, we should adopt a new policy perspective that is oriented...

Multidimensional welfare analysis has recently been revived by money-metric measures based on explicit fairness principles and the respect of individual preferences. To operationalize this approach, preference heterogeneity can be inferred from the observation of individual choices (revealed...

The Gini coefficient features prominently in Amartya Sen's 1973 and 1997 seminal work on income inequality and social welfare. We construct the Gini coefficient from socialpsychological building blocks, reformulating it as a ratio between a measure of social stress and aggregate income. We...

The social stress experienced by an individual from having a low relative income or from having a low income-based rank is a derivative of the individual's location in social space, and is the outcome of unfavorable comparisons with other individuals in that space. (The term social space stands...

Wildman (2021), who identifies "a clear association between income inequality [measured by the Gini coefficient] and COVID-19 cases and deaths," concludes that "a goal of government should be to reduce [income] inequalities and [thereby] improve [the COVID-19 outcomes /] underlying health of...

Social stress can cause physical and mental harm. It is therefore not surprising that public health policy makers have sought to identify and implement policies aimed at tackling this social ill. A frequently prescribed remedy is to reduce social stress by reducing income inequality, which is...

Examining the most heavily-cited publications in labor economics from the early 1990s, I show that few of over 3000 articles citing them directly replicates them. They are replicated more frequently using data from other time periods and economies, so that the validity of their central ideas has...

Many economic decisions involve a substantial amount of uncertainty, and therefore crucially depend on how individuals process probabilistic information. In this paper, we investigate the capability for probability judgment in a representative sample of the German population. Our results show...