3. The Concept of Utility
Personal Utility
Acknowledging that not all gains in life satisfaction are equal.
To address the linearity flaw in previous frameworks, we introduce Utility—a measure of the subjective value an individual derives from an outcome.
Personal Utility recognises that gains at the top of the life satisfaction scale offer diminishing returns. An intervention that helps a struggling person provides a massive boost to their utility, whereas the exact same intervention given to a comfortable person barely moves the needle.
Side Note: Education and Aspirations
Interventions like higher education increase a person's opportunities, but they also raise their aspirations. If reality fails to keep up with these inflated standards, highly educated individuals may report lower life satisfaction despite having objectively better lives.
The Limits of Self-Interest
Personal Utility correctly maps the non-linear value of happiness, but it evaluates individuals in a vacuum. It assumes citizens care only about their own lives. In reality, humans are social creatures who evaluate their own standing by looking at the gaps between themselves and others.
Next: Societal Utility