The economic study of individuals' well-being acknowledges that economic activity is not a goal in itself. Rather, its value derives from contributing to people’s happiness. Individual welfare is approximated through surveys on subjective well-being. Based on this approach, it can be analyzed to what extent economic conditions and institutional factors determine individual welfare.

Currently, we are particularly interested in:

  • Political participation, procedural utility and subjective well-being

  • Affective polarization and political behavior

  • Intuitive theories of happiness: Do people know what makes them happy?

  • Regulation of the consumption of addictive goods and individual well-being

  • Organization of the state and the firm, intrinsic motivation and subjective well-being

  • Educational systems and youth well-being

  • Experiences in life and beliefs about the world

Current Research Projects

Democracy and subjective well-being

The pursuit of happiness is often closely linked to the idea of a constitution by the people and for the people. The basic rules of democratic constitutions, however, come with rather different characteristics. Given the recent erosion of the social consensus on existing rules in some countries, there is a need to better understand how different state institutions affect people’s lives in terms of their individual well-being. In our research, we want to better understand the role of specific institutions like citizens’ access to popular initiatives and referendums or federalism. Moreover, we want to build up a conceptual framework that relates state institutions to people’s experience of outcome utility and procedural utility. The latter refers to the idea that people do not only value the consequences of the democratic decision-making process but also gain wellbeing from living and acting under this institutionalized process, as, for example, the possibilities to participate among equals can contribute to a positive sense of self.

Related publications:

Forthcoming with Routledge: Stutzer, Alois, Benjamin Jansen and Tobias Schib (2024). Democracy and Wellbeing. In: Marie Briguglio, Natalia V. Czap and Kate Laffan (eds.). Wellbeing and Policy: Evidence for Action. Routledge

Stutzer, Alois (2020). Happiness and Public Policy: A Procedural Perspective. Behavioural Public Policy, 4(2): 210-225. [link | paper]

Frey, Bruno S. and Alois Stutzer (2019). Public Choice and Happiness. In: Roger D. Congleton, Bernard Grofman and Stefan Voigt (eds.). The Oxford Handbook of Public Choice, Volume 1. Oxford: Oxford University Press: 779-795. [link | paper]

Frey, Bruno S., Matthias Benz and Alois Stutzer (2004). Introducing Procedural Utility: Not Only What but also How Matters. Journal of Institutional and Theoretical Economics, 160(3): 377-401. [link]

Frey, Bruno S. and Alois Stutzer (2000). Happiness, Economy and Institutions. The Economic Journal, 110(466): 918-938. [link]

Psychedelics and well-being

In recent years, interest in psychedelic substances has increased significantly. Psychedelics such as lysergic acid diethylamide (LSD), psilocybin and dimethyltryptamine (DMT) are psychoactive substances that can intensely alter perception, affect and a range of cognitive processes. In most countries, the use of such substances is illegal apart from authorized exceptions. However, they have long been used for personal, spiritual or therapeutic purposes and have recently received increasing attention in clinical research. In this interdisciplinary collaboration between CREW and the Department of Clinical Pharmacology & Toxicology at the University Hospital Basel, the study of the effects of psychedelic substances is being expanded to also include subjective well-being.

Utility Misprediction

To make good decisions, people need to have correct expectations about how much utility the different available options offer them. This is a tenant of many normative decision theories. The basic assumption in economic theory is that, on average, individuals can correctly predict what will bring them how much utility. The aim of this research project is to investigate this assumption empirically by studying whether individuals have accurate beliefs about the satisfaction consequences of life events and their (life-)decisions.

Related publications:

Odermatt, Reto and Alois Stutzer (2022). Does the Dream of Home Ownership Rest upon Biased Beliefs? A Test Based on Predicted and Realized Life Satisfaction. Journal of Happiness Studies, 23: 3731–3763 [link]

Odermatt, Reto, Nattavudh Powdthavee and Alois Stutzer (2021). Are Newly Self-Employed Overly Optimistic About Their Future Well-Being? Journal of Behavioural and Experimental Economics, 95: 101779. [link]

Odermatt, Reto and Alois Stutzer (2019). (Mis‐)Predicted Subjective Well‐Being Following Life Events. Journal of the European Economic Association, 17(1): 245–283 [link

Frey Bruno S., Stutzer Alois (2014). Economic Consequences of Mispredicting Utility. Journal of Happiness Studies, 15: 937–956. [link]

Hsee, Christopher K., Yuval Rottenstreich and Alois Stutzer (2012). Suboptimal Choices and the Need for Experienced Individual Well-Being in Economic Analysis. International Journal of Happiness and Development, 1(1): 63-85. [link

Frey, Bruno S. and Alois Stutzer (2006). Mispredicting Utility and the Political Process. In: Edward J. McCaffery and Joel Slemrod (eds.). Behavioral Public Finance. New York: Russell Sage Foundation: 113–140. [link]