Anna Maffioletti

Attitudes to risk and attitudes to uncertainty: experimental evidence

In a series of experiments the interactions among individual attitudes towards risk and uncertainty, the sign of the outcome domain, and the way uncertainty is represented are tested. This is done in a unified framework, eliciting individual values by means of a second price auction. Results confirm the presence of the well-known fourfold pattern of risk attitude (risk aversion for gains and risk seeking for losses at high probability, and risk seeking for gains and risk aversion for losses at low probability) and show that this pattern can also be extended to uncertainty. In the valuation of losses the modal pattern is decreasing risk and uncertainty aversion as the probability of loss increases, while increasing risk and uncertainty aversion is observed for gains. Moreover, it is found that the size of reaction to uncertainty does not depend on the outcome domain, and that it persists in the face of an incentive-compatible mechanism to elicit preferences.

More Terminological and Methodological Problems in Measuring Happiness, Life Satisfaction and Well-Being: Some First Empirical Results

This chapter presents the results of a field survey on happiness, life satisfaction and well-being in Piedmont (Northern Italy) by means of 1,250 face-to-face interviews financed by the Piedmont Government. In the literature, the terms ‘happiness’, ‘life satisfaction’ and ‘well-being’ are mostly used as synonymous and measured by asking individuals to self-report them, on a verbal or numerical scale. In order to assess if these three terms are synonymous and to measure their level in Piedmont we used three different scales: a verbal scale (7 steps), a unipolar cardinal scale (from 1 to 7) and a bipolar cardinal scale (from −3 to 3). We examine the effects of wording and scales on the main determinants of the three notions. Wording clearly matters: not only each subject (in most cases) self-reports differently her/his own happiness, life satisfaction and well-being, and therefore these three notions may be similar but not equivalent—but also the determinants of the three notions are different. Moreover, the use of different scales leads to different results. However, a clear pattern does not emerge: therefore we cannot state which numerical scale performs better in representing the verbal self-reported valuations. JEL Classifications: B21, B41, C83, D03, J28.