Social preferences and well-being: theory and evidence

Abstract

Many studies have shown that individuals engage in prosocial behaviors, such as pro-environmental and charitable behaviors, on the basis of their social preferences. But the nature of social preferences has not been well studied, and it has been unclear how they relate to individual well-being. It is important to clarify this linkage so that various policies and laws can maximize social welfare. This study explores the hypothesis that social preferences are in general positively correlated with subjective well-being and that individuals who are more prosocial are happier than individuals who are more proself. This study first presents a theoretical model that mathematically describes the relationship between social preferences and subjective well-being. Then it uses survey data from the United States to empirically examine the relationship between the two. Regression analysis finds a statistically significant positive correlation between prosociality and total well-being, a correlation driven primarily by eudaimonic well-being and hedonic well-being, subdomains of total well-being. The effect size of prosociality on well-being is similar to the effect sizes of parenthood, income, and education, which are important determinants of well-being, thus confirming that prosociality is a crucial determinant of individual well-being.