The Importance of ‘Domain Importance’ for Happiness Economics

Abstract

In happiness economics, subjective well-being is usually modeled as a unidimensional construct measuring global life satisfaction or global happiness. Most studies do not account for the fact that global life satisfaction and happiness are aggregates of satisfaction/happiness with different life domains. Only a few studies have analyzed the relationship between the overall level of subjective well-being and the satisfaction level in different life domains. However, although happiness economists usually admit that happiness “means different things for different people” (Frey and Stutzer 2002, p. 3), they emphasize that for “many issues, a common metric of the ‘overall evaluation of life’ is suitable” (ibid., p. 28). Thus, they not only think that a detailed analysis of different domain satisfactions is unnecessary, they also implicitly work under the assumption that the importance ranking of different life domains is the same across all individuals. However, this assumption is not realistic, as the importance of life domains may differ greatly among individuals, which we will show in this chapter. There also is preliminary evidence to this effect from quality of life research (e.g. Hsieh 2004, 2012), although the existing studies suffer from severe limitations, such as non-representative samples of limited size.