Policy decisions at the organizational, corporate, and governmental levels should be more heavily influenced by issues related to well-being––people’s evaluations and feelings about their lives. Domestic policy currently focuses heavily on economic outcomes, although economic indicators omit, and even mislead about, much of what society values. We show that economic indicators have many shortcomings, and that measures of well-being point to important conclusions that are not apparent from economic indicators alone. For example, although economic output has risen steeply over the past decades, there has been no rise in life satisfaction during this period, and there has been a substantial increase in depression and distrust. We argue that economic indicators were extremely important in the early stages of economic development, when the fulfillment of basic needs was the main issue. As societies grow wealthy,

According to adaptation theory, individuals react to events but quickly adapt back to baseline levels of subjective well-being. To test this idea, the authors used data from a 15-year longitudinal study of over 24,000 individuals to examine the effects of marital transitions on life satisfaction. On average, individuals reacted to events and then adapted back toward baseline levels. However, there were substantial individual differences in this tendency. Individuals who initially reacted strongly were still far from baseline years later, and many people exhibited trajectories that were in the opposite direction to that predicted by adaptation theory. Thus, marital transitions can be associated with long-lasting changes in satisfaction, but these changes can be overlooked when only average trends are examined. In their classic article on adaptation, Brickman and Campbell (1971) argued that people are confined to a hedonic treadmill— they are doomed to experience stable levels of well-being because, over time, they adapt to even the most extreme positive and negative life circumstances. This idea has received considerable empirical support. Most cross-sectional studies of life satisfaction and long-term emotional levels find that objective circumstances

Positive psychology has flourished in the last 5 years. The authors review recent developments in the field, including books, meetings, courses, and conferences. They also discuss the newly created classification of character strengths and virtues, a positive complement to the various editions of the Diagnostic and Statistical Manual of Mental Disorders (e. g., American Psychiatric Association, 1994), and present some cross-cultural findings that suggest a surprising ubiquity of strengths and virtues. Finally, the authors focus on psychological interventions that increase individual happiness. In a 6-group, random-assignment, placebocontrolled Internet study, the authors tested 5 purported happiness interventions and 1 plausible control exercise. They found that 3 of the interventions lastingly increased happiness and decreased depressive symptoms. Positive interventions can supplement traditional interventions that relieve suffering and may someday be the practical legacy of positive psychology.

This research identifies a new source of failure to make accurate affective predictions or to make experientially optimal choices. When people make predictions or choices, they are often in the joint evaluation (JE) mode; when people actually experience an event, they are often in the single evaluation (SE) mode. The “utility function ” of an attribute can vary systematically between SE and JE. When people in JE make predictions or choices for events to be experienced in SE, they often resort to their JE preferences rather than their SE preferences and overpredict the difference that different values of an attribute (e.g., different salaries) will make to their happiness in SE. This overprediction is referred to as the distinction bias. The present research also specifies when the distinction bias occurs and when it does not. This research contributes to literatures on experienced utility, affective forecasting, and happiness. Suppose that a person is faced with two job offers. She finds one job interesting and the other tedious. However, the interesting job will pay her only $60,000 a year, and the tedious job will pay her $70,000 a year. The person wants to choose the job that will give her the greatest overall happiness. To make that choice, she tries to predict the difference in happiness between earning $60,000 a year

Abstract: Social norms are usually neglected in economics, because they are to a large extent enforced through non-market interactions and difficult to isolate empirically. In this paper, we offer a direct measure of the social norm to work and we show that this norm has important economic effects. The stronger the norm, the more quickly unemployed people find a new job. This behavior can be explained by utility differences, probably due to social pressure. Unemployed people are significantly less happy than employed people and their reduction in life satisfaction is the larger, the stronger the norm is. (96 words) JEL classification: I31, J64

Four studies support the development and validation of a framework for understanding the range of social psychological outcomes valued subjectively as consequences of negotiations. Study 1 inductively elicited and coded elements of subjective value among students, community members, and practitioners, revealing 20 categories that theorists in Study 2 sorted into 4 underlying subconstructs: Feelings About the Instrumental Outcome, Feelings About the Self, Feelings About the Negotiation Process, and Feelings About the Relationship. Study 3 proposed a new Subjective Value Inventory (SVI) and confirmed its 4-factor structure. Study 4 presents convergent, discriminant, and predictive validity data for the SVI. Indeed, subjective value was a better predictor than economic outcomes of future negotiation decisions. Results suggest the SVI is a promising tool to systematize and encourage research on subjective outcomes of negotiation.

We sought to examine the concept of authentic leadership and discuss the influences of authenticity and authentic leadership on leader and follower eudaemonic well-being, as well as examine the processes through which these influences are realized. This was accomplished in four ways. First, we provide an ontological definition of authentic leadership, rooted in two distinct yet related philosophical approaches to human well-being: hedonism and eudaemonia. Second, we develop a multi-component model of authentic leadership based on recent theoretical developments in the area of authenticity. The resulting model consists of self-awareness, unbiased processing, authentic behavior/acting and authentic relational orientation. Third, we discuss the personal antecedents (leader characteristics) of authentic leadership as well as the outcomes of authentic leadership for both leaders and followers and examine the processes linking authentic leadership to its antecedents and outcomes. Fourth, we discuss the implications of this work for authentic leadership theory and then provide some practical implications for developing authentic leaders.

The commodities one chooses to consume serve as visible signals of identity. With increased affluence, more economic resources are required to confirm one's identity as a "normal, respectable member of the society." We argue that this induces formal structures similar to preferences for high relative consumption. This increased cost of confirming identity occurs if increased national income is used for private consumption. This is not the case, however, if increased national income is used to finance more public goods, since this does not increase the cost of confirming identity. Thus we argue that when we take the symbolic meaning of commodities into account, the social optimal level of public (and environmental) goods increases. Moreover, general income or consumption taxes may then be efficiency enhancing. This contrasts with the traditional estimates of marginal cost of funds, where the efficiency loss of taxation is added to the cost of providing public goods. Paper prepared as background paper for the World Development Report.

In our morally pluralistic world, there is distressingly little agreement on what it means to be a good

Publication details, including instructions for authors and subscription information: