Comparing Interpersonal Comparisons in Utility Theory and Happiness Research

Social scientists are reluctant to make explicit interpersonal comparisons of well-being. However, implicit comparisons are made on a surprisingly regular basis. These comparisons are based on the wealth and the Kaldor--Hicks concept in utility theory and on self-reported well-being in happiness research. Taking a utilitarian stance, this paper tests the ethical foundations of both principles. While self-reported well-being serves as an acceptable proxy for utilitarian decision-making, the Kaldor--Hicks concept does not appear so. Implications for evaluating policies are outlined.