Understanding Well-being Data

chapter 3 Looking at Well-being Data in Context

Preference satisfaction

Preference satisfaction accounts work on the premise that ‘what is best for someone is what would best fulfil all of his[1] desires’ [2]. This is how economists have long approached understanding well-being [3]. The rationale behind expressing well-being like this for economists is that people’s preferences are revealed by what they purchase (see Chap. 2, Box 2.4 for a description). By extension, this means that the higher a person’s income, the more they are able to gain access to what they want. Also, the greater the choice available, the more able people are to satisfy their desires. The idea that choice is better is also a driving principle of new public management we also encountered in Chap. 2: the rationale being that people should be free to purchase from a wide variety of market providers, rather than public services being delivered by the public sector.

It is this account which has historically informed policy decisions at a monitoring level, using GDP as a proxy for well-being.[4] It is also this account of well-being that the Easterlin paradox [5] found wanting, as Easterlin’s analysis found that improved material living standards had not improved measured happiness in wealthy countries over time. This is largely assumed to be as a result of adaptation, in that as one preference becomes satisfied, we adapt and want more.[6] This is ultimately seen as benefiting the economy, but bad for people and societies. Alongside empirical issues are concerns that ‘making preference satisfaction the measure of political health completely cuts out the possibility of public deliberation about the ends we should pursue as a self-governing people’ [7]. This latter issue was, of course, what the UK’s MNW debate aimed to overcome.


  1. His desires being all that were considered important in 1984, of course[]
  2. Parfit 1984, 494[]
  3. Dolan and Peasgood 2008[]
  4. By proxy we mean it is an indirect measure, described in Chap. 2. Preference satisfaction has also been used widely in policy appraisal as a form of cost-benefit analysis (CBA) which values benefts according to people’s willingness to pay (HM Treasury 2003), but these are contested (Dolan et al. 2011a).[]
  5. 1973[]
  6. Layard explains the principle of adaptation well in his book (2006, 48–49).[]
  7. Williamson 2010, 171[]