Angus Deaton writes,
The measure I use is an evaluative measure of well-being that asks people to report, on an eleven-point scale, from 0 to 10, how their life is going. The question is originally due to Cantril (1965), and is asked in exactly the same way of all individuals sampled by Gallup in their World Poll. The question is “Please imagine a ladder, with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally stand at this time?” There is no mention of happiness, so the ladder is explicitly not a hedonic measure that enquires into momentary mood or feelings. Rather it asks people to assess how their life is going “at this time,” an answer to which requires cognitive effort by the respondent, and which is a more considered assessment of well-being than trying to weight together or average the host of emotions and feelings that make up the evanescent texture of everyday life. In the surveys I use here, the Cantril ladder question is immediately followed by a question identical to the ladder question but with the last sentence replace by, “Just your best guess, on which step do you think you will stand in the future, say about five years from now?” I shall use this question too.
I think that as intangible goods and services become increasingly important, economists are going to have to resort to subjective measures. This means that, like Deaton, we will have to think carefully about how we take those measurements.