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Utility and Happiness Other Recent Work on
the Economics of Happiness at the University of
Michigan

• Miles Kimball and Robert Willis

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Jean-Benoit Rousseau

• First Ph.D. Dissertation in the in the U of M
  Economics Department entirely on the Economics of
  Happiness
• Understanding the Easterlin Paradox in the U.S.
• Life Cycle of Happiness for Men and Women

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Happiness by Income Quintile
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Empirics of Hedonic Adaptation

• Dynamics of Happiness after Major Life Events in
  the HRS
• Kimball, Ryan Nunn, Dan Silverman
• Unhappiness After Hurricane Katrina
• Kimball, Helen Levy, Fumio Ohtake, Rousseau,
  Yoshiro Tsutsui
• The Dynamics of Happiness Evidence from Daily
  Panel Data
• Kimball, Ohtake, Tsutsui
• Happiness and the 2008 Election
• Kimball, Ohtake, Titiunik, Tsutsui

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Utility and Happiness by Miles Kimball and
Robert Willis

• 2 Key Ideas
• Price-Theoretic Approach to Happiness
• Elation Theory of Happiness

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The Price Theoretic Approach to Happiness
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The Elation Theory of Happiness
(Lifetime Utility Innovation)
(Happiness Baseline Mood Elation)
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Implication of Both Ideas Combined

• EITHER
• The integral of resulting elation measures the
  size of a life-time utility innovation.
• OR
• Preference for happiness will induce departures
  from expected utility theory
• after substituting the function for happiness
  into the utility function,
• even though we assumed expected utility over the
  ultimate goods (including happiness)

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The Price Theoretic Approach to Happiness
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The Elation Theory of Happiness