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Frey, Bruno S.
Luechinger, Simon
Stutzer, Alois
Year of Publication: 
Series/Report no.: 
CESifo Working Paper No. 1158
This paper discusses a novel approach to elicit people's preferences for public goods, namely the life satisfaction approach. Reported subjective well-being data are used to directly evaluate utility consequences of public goods. The strengths of this approach are compared to traditional approaches and identification issues are addressed. Moreover, it is applied to estimate utility losses caused by terrorist activities in France, the UK and the Republic of Ireland. Terrorism in these countries depresses life satisfaction in a sizeable and robust way. However, the calculation of the trade-off between terrorism and income requires improved measurement of the marginal utility of income.
life satisfaction approach
non-market valuation
cost-benefit analysis
subjective well-being
and terrorism
Document Type: 
Working Paper

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