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Happiness, freedom and control
[journal article]
Abstract How do people value freedom of choice? Drawing on economics and psychology the paper provides an hypothesis and empirical evidence on how individuals may value freedom of choice and derive utility from it. It is argued that the degree of perceived control that individuals have over choice - a constr... view more
How do people value freedom of choice? Drawing on economics and psychology the paper provides an hypothesis and empirical evidence on how individuals may value freedom of choice and derive utility from it. It is argued that the degree of perceived control that individuals have over choice - a construct known as the locus of control in psychology - regulates how we value freedom of choice. People who believe that the outcome of their actions depends on internal factors such as effort and skills (the 'internals') have a greater appreciation of freedom of choice than people who believe hat the outcome of their actions depends on external factors such as fate or destiny (the 'externals'). We find some evidence in support of this hypothesis using a combination of all rounds of the World and European Values Surveys. A variable that measures freedom of choice and the locus of control is found to predict life satisfaction better than any other known factor such as health, employment, income, marriage or religion, across countries and within countries. We show that this variable is not a proxy of happiness and measures well both freedom of choice and the locus of control. 'Internals' are found to appreciate freedom of choice more than 'externals' and to be happier. These findings have important implications for individual utility, social welfare and public policies.... view less
Keywords
locus of control
Classification
Social Psychology
Free Keywords
D1; D6; D7; D9; H4; O1; Happiness; Utility; Freedom of choice
Document language
English
Publication Year
2009
Page/Pages
p. 146-161
Journal
Journal of Economic Behavior & Organization, 71 (2009) 2
DOI
https://doi.org/10.1016/j.jebo.2009.04.008
Status
Postprint; peer reviewed
Licence
PEER Licence Agreement (applicable only to documents from PEER project)