Time horizons

Whereas more traditional approaches to valuation enable time horizons to be specified if necessary (i.e. a period of time over which respondents would be willing to pay, or willing to accept, a particular non-market good), the subjective well-being valuation approach does not come with a fixed time-frame. Dolan and Metcalfe (2008) note that current valuation approaches fail to address the issue of how long changes in subjective well-being are thought to last as a result of the effects of a particular non-market factor.47

Time horizons are also important for being able to adequately detect and value the impact of events, interventions or non-market factors. Consideration of the mechanisms through which subjective well-being impacts are realised, and the time frames over which those mechanisms operate, is thus important in selecting data sets for valuation purposes and in interpreting the findings (Frey, Luechinger and Stutzer, 2004). The potential for partial adaptation to life events over time (see Section 2) also has implications for valuations. For example, the subjective well-being impact of widowhood ten years after the event is likely to be different to the subjective well-being impact just one year after the event. Thus, for the valuation of exogenous events, it is important to specify, a priori, the time frame(s) of interest and to collect, examine and interpret the data accordingly. In particular, scope exists for measuring effects at given points in time following a change, as well as for establishing longer-term averages or cumulants.

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