Experienced utility as a standard of policy evaluation

Daniel Kahneman, Robert Sugden

Research output: Contribution to journalArticlepeer-review

355 Citations (Scopus)


This paper explores the possibility of basing economic appraisal on the measurement of experienced utility (utility as hedonic experience) rather than decision utility (utility as a representation of preference). Because of underestimation of the extent of hedonic adaptation to changed circumstances and because of the "focusing illusion" (exaggerating the importance of the current focus of one's attention), individuals' forecasts of experienced utility are subject to systematic error. Such errors induce preference anomalies which the experienced utility approach might circumvent. The "day reconstruction method" of measuring experienced utility is considered as a possible alternative to stated preference methods.
Original languageEnglish
Pages (from-to)161-181
Number of pages21
JournalEnvironmental and Resource Economics
Issue number1
Publication statusPublished - 1 Sep 2005


  • contingent valuation
  • day reconstruction method
  • experienced utility
  • focusing illusion

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