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social relationships, the environment etc, without relying on market data or undertaking costly preference surveys. Hence wellbeing valuation is an increasingly popular method in the UK government. Wellbeing valuation eradicates many of the problems related to preference valuation methods discussed above because we are not asking people directly how much they value something. Alongside the context-sensitivity problems related to preferences, preference valuation methods can be problematic because they rely on people accurately forecasting how the non-market good will impact their lives. And there is lots of evidence that people are unable to do this accurately for many types of goods118. They tend to mis-predict how much they will really like things, forgetting about all the other things that will vie for their attention in the actual experience of their lives119. As Nobel Laureate Daniel Kahneman states ‘Nothing is as important as you think it is when you are thinking about it’.120 Instead SWB data allow us to assess and value what is important in people’s lives when they are not thinking about how important those things are. One cannot overstate how important this is (Fujiwara and Dolan, 2013)121 – we can find out how important cultural activity is alongside all of the other things that affect wellbeing and that matter in life. And SWB is intuitively appealing. SWB measures like life satisfaction ranked highest among welfare measures in a recent UK opinion poll122. Dolan and Metcalfe’s YouGov survey of a sample of the UK population found that people were in favour of government allocating resources on the basis of how they affect people’s SWB rather than whether they satisfy people’s preferences. In 2011 we developed the first government-level guidance and recommendations on wellbeing valuation (Fujiwara and Campbell, 2011)123. It is still a method in development, but recent advances have made the method more robust for use in policy evaluation124. The method has drawn huge interest from many government departments and international organisations – most UK departments now use the wellbeing valuation approach in CBA. Wellbeing valuation is an exciting new opportunity for valuing outcomes related to cultural activity because the Taking Part survey and the Understanding Society survey both contain a wealth of data on cultural engagement and SWB. Wellbeing valuation is therefore cost-effective because the data is often already available. This means that contrary to beliefs that economic valuation methods can only be undertaken by large cultural organisations (eg see Donovan’s (2013)125 conclusions), we believe that wellbeing valuation and CBA-type analyses can be
118 Gilbert (2007). Stumbling on Happiness. Harper Perennial, London. 119 Kahneman (2011). Thinking fast and slow. Allen Lane, London. 120 Kahneman (2011, p.402). Thinking fast and slow. Allen Lane, London. 121 Fujiwara and Dolan (2013). Valuing mental health: how a subjective wellbeing approach can show just how much it matters. UKCP Paper (forthcoming). 122 Dolan and Metcalfe (2011). Comparing measures of subjective wellbeing and views about the role they should play in policy. Office for National Statistics. 123 Fujiwara and Campbell (2011). Valuation Techniques for Social Cost-Benefit Analysis: Stated Preference, Revealed Preference and Subjective Well-Being Approaches. HM Treasury & Department for Work and Pensions. 124 For example, see Fujiwara (2013). A General Method for Valuing Non-Market Goods Using Wellbeing Data: Three-Stage Wellbeing Valuation. cep.lse.ac.uk/pubs/download/dp1233.pdf 125 Claire Donovan (2013) ‘A holistic approach to valuing our culture: a report to the Department of Culture, Media and Sport’. London: DCMS. www.gov.uk/government/publications/a-holistic-approach-to-valuing-our-culture