Surveys Vs. Revealed Preference, II
[Layard] is saying that you cannot trust people’s behavior as an indicator of their preferences, because their tastes may be socially constructed.
However, if tastes are socially constructed, then it seems to me that social context is at least as likely to affect survey research as it is to affect behavior. For example, Layard reports that marriage increases happiness, based on survey research…it could easily be that the difference in reported happiness reflects respondents’ views of how they are expected to feel about being single or married.
In a shorter comment, Zimran Ahmed writes
I had the rare privilege of meeting Nobel Prize winning Chicago economist Ronald Coase today…
I asked him if the questionnaire based data sets behavioral empirical economists come up with were any good, and he said they were worthless because they don’t test what people do when it matters, and that’s when folks start to think seriously about costs.
For Discussion. Consider the popularity of the movie “Titanic.” Why are so many people willing to pay to see something that makes them sad? Does this complicate the relationship between money and happiness?