Subjective and Objective Well-Being in Relation to Economic Inputs: Puzzles and Responses

SUMMARY
Well-being is an umbrella concept that embraces both subjective well-being (SWB) and objective well-being (OWB). This paper confronts the problem that income, the measure that economists largely concentrate on, is not satisfactorily correlated with either. Furthermore, OWB is not closely related to SWB. So all three concepts are identifying different underlying realities and need different measures. The paper goes on to identify and discuss possible responses to these discrepancies. One is to re-specify how income, SWB or OWB are measured. Another is to ignore the discrepancies and continue to focus on measures of income or opulence. A further possible response is to replace or subsume the concepts under other ones, for example by claiming that all that matters is choice: having a choice, having more choice, getting one's choice. The paper rejects ignoring or replacing the discrepant concepts, and argues that we must respect and seek to understand the causal factors that explain the various - sometimes competitive - relations between growing economic inputs and OWB and SWB, and to face the issues involved. Furthermore, we should clarify the choices involved in giving priority to either subjective or objective well-being, for particular purposes in particular cases. To understand well-being and human development these various theoretical issues must be confronted.