TY  - RPRT
        AU  - Frey, Bruno S.
AU  - Stutzer, Alois
        TI  - Economic Consequences of Mispredicting Utility
        PY  - 2013/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 7430
        UR  - https://www.iza.org/publications/dp7430
        AB  - In a simple conceptual framework, we organize a multitude of phenomena related to the (mis)prediction of utility. Consequences in terms of distorted choices and lower wellbeing emerge if people have to trade-off between alternatives that are characterized by attributes satisfying extrinsic desires and alternatives serving intrinsic needs. Thereby the neglect of asymmetries in adaptation is proposed as an important driver. The theoretical analysis is consistent with econometric evidence on commuting choice using data on subjective well-being. People show substantial adaptation to a higher labor income but not to commuting. This may account for the finding that people are not compensated for the burden of commuting.
        KW  - time allocation
KW  - extrinsic/intrinsic attributes
KW  - individual decision-making
KW  - misprediction
KW  - adaptation
KW  - subjective well-being
        ER  -