An Overview of Intertemporal Measures of Individual Well-Being: Can They Explain Life Satisfaction Better?

Traditional economic modeling has neglected the basic fact that individual well-being depends on one’s own life course and on comparisons with others. These assumptions have been challenged by an increasing number of contributions in the income-distribution literature on the measurement of individual well-being. These have proposed various indices which allow different aspects of past experiences to be brought into the analysis of the phenomenon under consideration. This chapter is a review of these measures with the aim of offering some guidance to the recent developments of the parallel literature on happiness