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Being independent is a great thing: subjective evaluations of self-employment and hierarchy


Benz, Matthias; Frey, Bruno S (2008). Being independent is a great thing: subjective evaluations of self-employment and hierarchy. Economica, 75(298):362-383.

Abstract

One can be independent, or one can be subject to decisions made by others. This paper argues that this difference, embodied in the institutional distinction between the decision-making procedures ‘market’ and ‘hierarchy’, affects individual wellbeing beyond outcomes. Taking self-employment as an important case of independence, it is shown that the self-employed derive higher satisfaction from work than those employed in organizations, irrespective of income gained or hours worked. This is evidence for procedural utility: people value not only outcomes, but also the processes leading to outcomes.

Abstract

One can be independent, or one can be subject to decisions made by others. This paper argues that this difference, embodied in the institutional distinction between the decision-making procedures ‘market’ and ‘hierarchy’, affects individual wellbeing beyond outcomes. Taking self-employment as an important case of independence, it is shown that the self-employed derive higher satisfaction from work than those employed in organizations, irrespective of income gained or hours worked. This is evidence for procedural utility: people value not only outcomes, but also the processes leading to outcomes.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:May 2008
Deposited On:10 Jun 2008 07:21
Last Modified:05 Apr 2016 12:23
Publisher:Wiley-Blackwell
ISSN:0013-0427
Publisher DOI:https://doi.org/10.1111/j.1468-0335.2007.00594.x

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