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My research is in behavioural and experimental economics, combining theory and empirics. My work so far is in two main areas: (i) decisions under uncertainty and (ii) subjective well-being. I also have some health policy work that arose from my interest in subjective well-being. See also my Google Scholar page.


Cost-benefit analysis of psychological therapy (with R. Layard, D. Clark, and M. Knapp), National Institute Economic Review, 2007, no. 202. p. 90-98. This paper analyzes the economic and subjective well-being costs of common mental illnesses (such as depression, anxiety, and phobias), and provides a cost-benefit analysis for the establishment of designated treatment centers for these disorders (in terms of the government's budget, as well as from the point of view of society as a whole). This paper was instrumental (as part of a broad campaign) in convincing the U.K. government to allocate the necessary budget.

The Marginal Utility of Income (with R. Layard and S. Nickell), Journal of Public Economics, 2008, vol 92, pages 1846-1857. We study how fast the marginal utility of income declines as income increases using six different subjective well-being surveys (GSS, ESS, WVS, EQLS, SOEP, and BHPS). We estimate the elasticity of marginal utility with respect to income at about 1.26. Thus, the marginal utility of income declines somewhat faster than in proportion to the rise in income.

Does Relative Income Matter? Are the Critics Right? (with R. Layard and S. Nickell), in E. Diener, J. F. Helliwell, and D. Kahneman (ed.), International Differences in Well-Being, OUP, 2010. We consider the paper by Stevenson and Wolfers, which reassesses the Easterlin Paradox, and argues that the same happiness-income relationship appears to hold over time as in the cross-section. In this paper we provide evidence that while the Stevenson-Wolfers criticism may hold for developing countries, in advanced countries the weight of the evidence is that the time-series relationship between country happiness and country income is much weaker than the cross-sectional relationship between individual happiness and individual income.

Late-Life Decline in Well-Being Across Adulthood in Germany, the UK, and the US (principal authors: D. Gerstorf and N. Ram), Psychology and Aging, 2010, vol. 25(2), 477-485. This paper studies the decline in subjective well-being in the last years of life.

Review of: A Course in Behavioural Economics, by Eric Angner, Economic Record, 2014, vol 90 (291), 561-562.

Infrastructure Spending in China Increases Trust in Local Government (with Bingqin Li), Social Indicators Research, 2017, vol 132(1), p. 341-356. DOI 10.1007/s11205-015-1223-z. The post-financial crisis stimulus in China involved a dramatic increase in local infrastructure spending. We show that this resulted in a large increase in trust in local government, contrasting with a continued decrease in trust in national government. (working paper version),

The Emotional Consequences of Donation Opportunities (with Lara Aknin and John Helliwell), Journal of Positive Psychology, 2017, vol. 12(2), p. 169-177. DOI: 10.1080/17439760.2016.1163409. This is a lab experiment studying the emotional consequences of being given an opportunity to donate money. Generous donors gain emotionally, and non-donors and non generous donors lose, though the size of the loss is much smaller than the gain experienced by generous donors. The net effect is strongly positive.

The Welfare Consequences of Well-being Inequality (with Leonard Goff and John Helliwell), accepted for publication in Economic Inquiry.

Working papers

Why Choice Lists Increase Risk Taking (with David Freeman), R&R at Experimental Economics.

Losses Change the Experience of Inequality (with Lara Aknin and John Helliwell).

Priors and Desires: A Model of Optimism, Pessimism, and Cognitive Dissonance (being revised). This paper offers a model of optimism, pessimism, and cognitive dissonance.

Wishful Thinking (being revised). This paper offers an experimental test of wishful thinking in predictions of market prices.

Life-Satisfaction and Relative Income - Perceptions and Evidence (with G. Wagner and J. Schupp). This paper studies the effect of income comparisons on subjective well-being using a unique dataset, in which we asked people for the income relative to comparisons groups of interest. We find that workplace comparisons are particularly important (possibly as an indicator of professional success), over and above a person's absolute income, and that comparisons to other people in general also matter. We find little or no evidence for comparisons with friends or neighbors.

Research in progress

Utility and Procedures: what came first? (with Yoram Halevy, UBC). An experiment on procedural rationality in portfolio choice problems.

The risk preferences of the anxious and depressed (with Xue-Ying Cheng, U. Melbourne)