« What's so special about China's exports? | Main | Economic forecasting: the good, the bad, and the ugly »

Wednesday, January 25, 2006



It's a shame that - generally speaking - when people see evidence that undermines the legitimacy of neoclassical economics they automatically question whether economics itself is under attack. It'd be like rejecting Jackson Pollock and automatically dispensing with Picasso, Boccioni and Klee.

I think that it's possible to accept some of the findings of happiness research, and conclude that neoclassical economics has been weakened. But that should generate a demand for alternative branches of economic theory - all the more so those that are at the very roots of neoclassical economics but failed to follow the formalist path that is no being undermined.

In short, scholars such as Mises and Hayek should see their stock rise as a consequence of this research!

Arthur Eckart

I don't know how it's possible to conclude that people make consumption or utility mistakes. If someone prefers to watch TV or smoke a cigar than do something else, how can that be a mistake? It's a tradeoff. The person making the choice knows the opportunity costs, and is aware that "good" choices can replace "bad" choices. The utility function is not a one-size fits all model. Rather, it's about individual preferences and tastes. The article is really about social engineering.


specific consumption decisions taken by particular individuals are not utility maximizing, according to the individuals’ own evaluation

That would be rather conclusive to me. Predicting the results of our actions is difficult in the best of circumstances. Impulsivity, and buyer's remorse, are real problems. If only we all knew then what we know now.

Arthur Eckart

If an individual does something that's perceived by society as a "bad," although that's what the individual chooses to maximize utility, then of course the individual will not give a positive evaluation of that choice (to conform with the dominant group). What can be concluded is the "bad" choice of an individual doesn't conform with the "good" choices (or value judgments) inherent in the study. The study is biased and flawed.

cartucho r4

However, if tastes are socially constructed, then it seems to me that social context is at least as likely to affect survey research as it is to affect behavior. For example, Layard reports that marriage increases happiness, based on survey research...it could easily be that the difference in reported happiness reflects respondents' views of how they are expected to feel about being single or married.

contemporary art

Your story was equally beautiful and moving and congrats to you for surviving. It is very much helpful for them who want to know about it, Keep sharing.

The comments to this entry are closed.


  • TEST

  • Subscribe in NewsGator Online

Economist Weblogs



  • This is a personal web site, produced in my own time and solely reflecting my personal opinions. Statements on this site do not represent the views or policies of my employer, past or present, or any other organisation with which I may be affiliated. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.