This paper uses the gap between the level of an economy’s well-being and that of a people’s well-being as a measure of the overall economic ill-being in a society. In particular, it argues that such disparity is measurable using objective measures of and subjective measures for inflation and...

The Inequality-adjusted Human Development Index (IHDI) was adopted in the 20th anniversary edition of the <italic>Human Development Reports</italic>, in 2010. In using a penalty set-up for the calculations of the IHDI, however, the results overestimated the adjustments. This article suggests a revision to the...

The subjective well-being approach to environmental valuation is applied to analyze the valuation of greenhouse gas emissions with a fairness-adjustment in the valuation exercise. Results indicate that industrialized countries have high willingness-to-pay to reduce emissions. Developing...

A procedure for identifying the happy individuals in society is indispensable to efforts to align public policy with the needs of the citizenry. Individual self-reports on happiness, however, must first meet the dual requirements of cardinality and (at least) relative interpersonal comparability...

The paper presents evidence of a positive but very small long-run relationship between income growth and happiness. Such finding is usually presented as a refutation of the Easterlin Paradox. The paper, however, argues that what the evidence actually reveals is that income growth has very little...

The analyses of two online surveys involving college students found evidence that using a college basketball championship as focal event resulted in unstable subjective evaluations of happiness. However, the analyses also found that the focusing illusion had modest spillover on subjective...

Several recent papers argue that contracts provide reference points that affect ex post behavior. We test this hypothesis in a canonical buyer-seller relationship with renegotiation. Our paper provides causal experimental evidence that an initial contract has a highly significant and...

We present an international trade model with multiproduct firms. Firms are heterogeneously endowed with two types of capabilities that jointly determine the trade-off within firms between managing a large portfolio of products and producing at low marginal cost. The model can explain many of the...

This paper reports data from a laboratory experiment on two-period moral hazard problems. The findings corroborate the contract-theoretic insight that even though the periods are technologically unrelated, due to incentive considerations principals can benefit from offering long-term contracts...

We study a continuous-time game of strategic experimentation in which the players try to assess the failure rate of some new equipment or technology. Breakdowns occur at the jump times of a Poisson process whose unknown intensity is either high or low. In marked contrast to existing models, we...