The goal of the economy, politics, and social institutions should be to promote wellbeing among people as broadly as possible. Yet, the questions remain: what exactly is wellbeing? and, How do we measure it for public policy purposes?
Economists privilege revealed preferences (what we actually do) as more true than stated preferences (what we say we want). Yet, as I argue in The Good Life, stated preferences often better reveal our long-term aspirations, desires, and vision of the sort of person we would like to be and the sort of world we would like to live in. Stated preferences often take longer time horizons and are more generous in their pro-social stance.
An important new paper by Daniel J. Benjamin, Ori Heffetz, Miles Kimball, and Nichole Szembrot (2014) "Beyond Happiness and Satisfaction: Toward Well-Being Indices Based on Stated Preference" makes the case that while neoclassical economics focuses almost exclusively on revealed preferences, in the public policy domain this is impossible as individuals rarely make such choices. They constructed an instrument to measure stated preferences along with subjective wellbeing. By asking respondents to gauge stated satisfaction from alternative scenarios, they are able to measure marginal utility of aspects particular aspects of wellbeing.
It turns out that the eudaimonic aspects (being a good person, living according to certain personal values, having a life that is meaningful) rank among the highest.