The inclusion of a durable goods sector in sticky-price models has strong and unexpected implicat... more The inclusion of a durable goods sector in sticky-price models has strong and unexpected implications. Even if most prices are flexible, a small durable goods sector with sticky prices may be sufficient to make aggregate output react to monetary policy as though most prices were sticky. In contrast, flexibly priced durables with sufficiently long service lives can undo the implications of standard sticky price models. In a limiting case, flexibly priced durables cause monetary policy to have no effect on aggregate output. Our analysis suggests that durable goods prices are the most relevant data for calibrating price rigidity. (JEL E21, E23, E31, E52)
Although technology-driven economic growth generates gains in consumption and employment opportun... more Although technology-driven economic growth generates gains in consumption and employment opportunities, it may also negatively impact other dimensions of well-being, such as emotional well-being or sense of stability. We study 204 aspects of self-reported well-being among 1,576 US MTurk survey respondents, aggregated into seven themes: evaluative well-being, emotional well-being, positive perceptions of technology or economic growth, autonomy and flexibility, work environment, feelings of calmness and stability, and feelings of belonging and connection. Demographic associations with aspects of well-being vary somewhat across the themes. We highlight the value of a multidimensional approach when comparing well-being across different groups in the United States.
Would people choose what they think would maximize their subjective well-being (SWB)? We present ... more Would people choose what they think would maximize their subjective well-being (SWB)? We present survey respondents with hypothetical scenarios and elicit both choice and predicted SWB rankings of two alternatives. While choice and predicted SWB rankings usually coincide in our data, we find systematic reversals. We identify factors—such as predicted sense of purpose, control over one's life, family happiness, and social status—that help explain hypothetical choice controlling for predicted SWB. We explore how our findings vary by SWB measure and by scenario. Our results have implications regarding the use of SWB survey questions as a proxy for utility. (JEL D03, I31)
This paper proposes foundations and a methodology for survey-based tracking of well-being. First,... more This paper proposes foundations and a methodology for survey-based tracking of well-being. First, we develop a theory in which utility depends on "fundamental aspects" of well-being, measurable with surveys. Second, drawing from psychologists, philosophers, and economists, we compile a comprehensive list of such aspects. Third, we demonstrate our proposed method for estimating the aspects' relative marginal utilities—a necessary input for constructing an individual-level well-being index—by asking ~4,600 U.S. survey respondents to state their preference between pairs of aspect bundles. We estimate high relative marginal utilities for aspects related to family, health, security, values, freedom, happiness, and life satisfaction.
In 1996, Miles S. Kimball, Claudia R. Sahm, and Matthew D. Shapiro used the questions M1-M5 asked... more In 1996, Miles S. Kimball, Claudia R. Sahm, and Matthew D. Shapiro used the questions M1-M5 asked in the 1996 Family Interview to impute variables of risk tolerance and risk aversion. For information about the construction of these variables please refer to their paper: Risk Preferences in the PSID: Individual Imputations and Family Covariation." by Miles S.Kimball, Claudia R. Sahm, and Matthew D. Shapiro. American Economic Review Papers and Proceedings 99 (May 2009) 363-368, which may be found on our website: <br><br> Risk Preferences in the PSID: Individual Imputations and Family Covariation <br><br> Please find additional helpful information in the Appendix also found on our website: Risk Tolerance Appendix<br>
previously circulated under the title " Social Security, Retirement and Wealth: Theory and I... more previously circulated under the title " Social Security, Retirement and Wealth: Theory and Implications. " The opinions and conclusions are solely those of the authors and should not be considered as representing the opinions or policy of the Social Security Administration or any agency of the Federal Government. The authors gratefully acknowledge this support. The effect of Social Security rules on the age people choose to retire can be critical in evaluating proposed changes to those rules. This research derives a theory of retirement that views retirement as a special type of labor supply decision. This decision is driven by wealth and substitution effects on labor supply, interacting with a fixed cost of working that makes low hours of work unattractive. The theory is tractable analytically, and therefore well-suited for analyzing proposals that affect Social Security. This research examines how retirement age varies with generosity of Social Security benefits. A ten-p...
The inclusion of a durable goods sector in sticky-price models has strong and unexpected implicat... more The inclusion of a durable goods sector in sticky-price models has strong and unexpected implications. Even if most prices are flexible, a small durable goods sector with sticky prices may be sufficient to make aggregate output react to monetary policy as though most prices were sticky. In contrast, flexibly priced durables with sufficiently long service lives can undo the implications of standard sticky price models. In a limiting case, flexibly priced durables cause monetary policy to have no effect on aggregate output. Our analysis suggests that durable goods prices are the most relevant data for calibrating price rigidity. (JEL E21, E23, E31, E52)
Although technology-driven economic growth generates gains in consumption and employment opportun... more Although technology-driven economic growth generates gains in consumption and employment opportunities, it may also negatively impact other dimensions of well-being, such as emotional well-being or sense of stability. We study 204 aspects of self-reported well-being among 1,576 US MTurk survey respondents, aggregated into seven themes: evaluative well-being, emotional well-being, positive perceptions of technology or economic growth, autonomy and flexibility, work environment, feelings of calmness and stability, and feelings of belonging and connection. Demographic associations with aspects of well-being vary somewhat across the themes. We highlight the value of a multidimensional approach when comparing well-being across different groups in the United States.
Would people choose what they think would maximize their subjective well-being (SWB)? We present ... more Would people choose what they think would maximize their subjective well-being (SWB)? We present survey respondents with hypothetical scenarios and elicit both choice and predicted SWB rankings of two alternatives. While choice and predicted SWB rankings usually coincide in our data, we find systematic reversals. We identify factors—such as predicted sense of purpose, control over one's life, family happiness, and social status—that help explain hypothetical choice controlling for predicted SWB. We explore how our findings vary by SWB measure and by scenario. Our results have implications regarding the use of SWB survey questions as a proxy for utility. (JEL D03, I31)
This paper proposes foundations and a methodology for survey-based tracking of well-being. First,... more This paper proposes foundations and a methodology for survey-based tracking of well-being. First, we develop a theory in which utility depends on "fundamental aspects" of well-being, measurable with surveys. Second, drawing from psychologists, philosophers, and economists, we compile a comprehensive list of such aspects. Third, we demonstrate our proposed method for estimating the aspects' relative marginal utilities—a necessary input for constructing an individual-level well-being index—by asking ~4,600 U.S. survey respondents to state their preference between pairs of aspect bundles. We estimate high relative marginal utilities for aspects related to family, health, security, values, freedom, happiness, and life satisfaction.
In 1996, Miles S. Kimball, Claudia R. Sahm, and Matthew D. Shapiro used the questions M1-M5 asked... more In 1996, Miles S. Kimball, Claudia R. Sahm, and Matthew D. Shapiro used the questions M1-M5 asked in the 1996 Family Interview to impute variables of risk tolerance and risk aversion. For information about the construction of these variables please refer to their paper: Risk Preferences in the PSID: Individual Imputations and Family Covariation." by Miles S.Kimball, Claudia R. Sahm, and Matthew D. Shapiro. American Economic Review Papers and Proceedings 99 (May 2009) 363-368, which may be found on our website: <br><br> Risk Preferences in the PSID: Individual Imputations and Family Covariation <br><br> Please find additional helpful information in the Appendix also found on our website: Risk Tolerance Appendix<br>
previously circulated under the title " Social Security, Retirement and Wealth: Theory and I... more previously circulated under the title " Social Security, Retirement and Wealth: Theory and Implications. " The opinions and conclusions are solely those of the authors and should not be considered as representing the opinions or policy of the Social Security Administration or any agency of the Federal Government. The authors gratefully acknowledge this support. The effect of Social Security rules on the age people choose to retire can be critical in evaluating proposed changes to those rules. This research derives a theory of retirement that views retirement as a special type of labor supply decision. This decision is driven by wealth and substitution effects on labor supply, interacting with a fixed cost of working that makes low hours of work unattractive. The theory is tractable analytically, and therefore well-suited for analyzing proposals that affect Social Security. This research examines how retirement age varies with generosity of Social Security benefits. A ten-p...
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