Evolution and Theoretical Implications of the Utility Concept

Academic Editor: George Halkos Received: 29 August 2025 Revised: 20 September 2025 Accepted: 24 September 2025 Published: 29 September 2025 Citation: Di Foggia, G., Arrigo, U., & Beccarello, M. (2025). Evolution and Theoretical Implications of the Utility Concept. Economies,13(10), 283. https://doi.org/10.3390/ economies13100283 Copyright: © 2025 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/ licenses/by/4.0/). Review Evolution and Theoretical Implications of the Utility Concept Giacomo Di Foggia * , Ugo Arrigo and Massimo Beccarello Department of Business and Law, University of Milano-Bicocca, 20126 Milan, Italy; [email protected] (U.A.) *Correspondence: [email protected] Abstract We review the evolution of the concept of utility in economics, addressing the conceptual and terminological fragmentation that characterises the interdisciplinary debate. This study adopts the scoping review framework to systematically analyse the main theoretical approaches, ranging from utility as preference to utility as subjective satisfaction and wellbeing. Particular attention is paid to procedural utility, i.e., the utility derived from the way decisions are made and interactions develop, divided into three areas: individual, linked to autonomy and self-determination; interpersonal, related to the quality of social relations; and institutional, referring to participation and recognition. The analysis is based on three aspects: (i) how different theoretical traditions have interpreted utility and well-being; (ii) what convergences and divergences emerge in the contemporary literature; (iii) and what implications these factors have for research and public policy. We highlight the complementarity between approaches and suggest extending economic reflection to dimensions that are central to the well-being of individuals and societies. The insights of this study have public policy implications, indicating that, through well-defined institutions, distributive justice, and welfare systems, taxpayers’ hedonic utility can be transformed into the chrematistic utility of beneficiaries. Keywords: utility; well-being; preferences; happiness; procedural utility; outcome utility; economic theory; collective choices; public economics 1. Introduction Utility is the backbone of the utilitarianism concept that has been very influential among economists, apart from being necessary for understanding people’s welfare (Haslett, 1990). We highlight aspects that complicate treating it as univocal. The term utility has undergone a shift in meaning over time (Broome,1991;Witt,2016), transitioning from representing a material property of goods to a subjective mental state, later becoming synonymous with revealed preference, and recently, becoming a subject of reflection within the happiness and economics approach. The plural nature of utility makes comparison and aggregation, i.e., rankings of relative preferences (Fabian et al.,2022), intrinsically challenging (Sen,1991) due to its multiple frameworks (T. J. Brennan,1989). Alongside these two approaches—genealogical and pluralist—we focus on a third perspective that identifies two peculiarities that have not been adequately highlighted in the debate so far. The first deals with the coexistence of two meanings of utility: chrematistic utility (CU), anchored in the Aristotelian and, to some extent, Smithian tradition, and hedonic utility (HU). The latter concerns utility that generates the second peculiarity, given that it can be derived from outcomes and the processes by which they are obtained (Easterlin,2004;Frey & Stutzer,2000). The distinction between CU, deriving from the Economies 2025,13, 283 https://doi.org/10.3390/economies13100283 Economies 2025,13, 283 2 of 20 objective properties of goods, and HU, subjectively produced by persons thanks to goods, has important consequences on the interpersonal comparability of utility since, in the second case, it meets the well-known problems raised by Robbins. At the same time, in the first, it is exempt. We propose a broad typology of forms of utility to strengthen the theoretical foundations of welfare economics. Although the classification may also have implications for behavioural modelling, our primary objective is normative: to provide a conceptual framework for assessing well-being beyond the mere satisfaction of preferences. For clarity, preferences are treated here as indicators of well-being rather than as descriptors of observed behaviour. This distinction separates the normative from the positive perspective while preserving shared characteristics. Preference orderings may sometimes be invoked for simplification purposes. We explore the concept of utility by tracing its main conceptual transformations to recover its original semantic richness and theoretical depth. Critical steps in this evolution are identified: the pre-Bentham distinction between instrumental utility (IU) and pleasure, the post-Bentham identification of utility with personal well-being, the aseptic redefinition of utility in the revealed preference approach, and its re-hedonisation in the happiness and economics approach. Of these, the first two are particularly relevant. Indeed, while useful in the context of, e.g., consumer choices, the revealed preference approach struggles in areas where procedural dimensions are important. The impossibility of inferring welfare preferences from choices in the presence of procedural costs confirms the need to distinguish between these two concepts. In this sense, it is impossible to maintain consistency between choices and preferences on the one hand and between preferences and welfare on the other (Schwartz & Cheek,2017;Sen,2006; Yang,2018). Although the happiness and economics approach enables the dissection of the sources of perceived well-being, it risks underestimating its material component. We aim to highlight the centrality of two conceptual distinctions. The first is the distinction between CU and HU (Millgram,2000;Vigliarolo,2020), recovering the semantic clarity present in classical thought, and the second is the distinction between procedural and outcome utility (OU), extending the concept of procedural utility (PU) to non-institutional contexts. These two distinctions open new critical perspectives on established economic theories and raise questions about the legitimacy of exclusively using the OU in collective choices. In this context, the procedural and communicative approaches, the latter inspired by the philosopher Habermas, can offer an alternative to the simple aggregation of individual preferences, suggesting the need for justification and universalisation in collective decisionmaking processes. The goal is to systematise knowledge on the evolution of the utility concept in economics with implications that can benefit public decision-makers, who can draw valuable insights for developing and adapting sectoral policies, and scholars, for further theoretical and empirical research. This work engages with the classical literature on welfare economics and utility theory, strengthening the link between conceptual reflection and recent applications. The insights drawn from the literature identify some established trends and the emergence of multidisciplinary approaches. The original contributions of this work consist of a generalised summary of the main findings and a set of proposals aimed at enriching both academic and operational debate, offering an interpretative framework. After the introduction, the Section 2examines the transformation of the meaning attributed to the concept of utility throughout the history of economic thought. The Section 3 proposes a classification of the main theoretical utility variations, paying particular attention to the distinctions between dual utility, OU, PU, and hedonic and instrumental utility. Economies 2025,13, 283 3 of 20 The Section 4explores the nature of PU, which is analysed in four respects: individual action, interpersonal relations, communicative intersubjective contexts, and institutionalised processes. The Section 5discusses the theoretical implications of our work. 2. Research Framework Fragmentation that characterises economic analysis of utility and well-being makes it challenging to compare different approaches and limits the possibility of drawing implications for research and public policy. The theoretical basis has been selected by combining classic contributions from welfare economics and utility theory with the most recent developments in the literature to ground the analysis in a solid and up-to-date conceptual framework. The research gap identified is the lack of an integrated framework relating the different analytical and terminological traditions. Despite the growing number of contributions in the economic, psychological and philosophical fields, a systematic reflection helps clarify their theoretical links. To address this gap, the literature review was conducted using the scoping review framework (Arksey & O’Malley,2005;Levac et al.,2010), which is suitable for exploring complex and multidisciplinary research fields. In particular, the procedure involved: (i) identifying the problem and research questions, (ii) defining inclusion criteria, (iii) systematic searching of international databases and the selection of contributions through specific keywords, and (iv) the integration of classical references for the historical reconstruction of the debate. This approach ensures a consistent selection of sources and allows us to distinguish between results derived from the literature and original contributions proposed in this work. Nevertheless, our analysis has some limitations, both in its scope, which is far from exhaustive and in the necessary simplifications. Given the abovementioned considerations, this study is based on the following research questions: How have different theoretical traditions defined and interpreted the concept of utility and well-being? What are the main conceptual and terminological convergences and divergences in the contemporary literature on utility and well-being? What implications arise from the analysis for the academic debate and the development of wellbeing-oriented public policies? It should be recognised that many concepts more explicit than utility exist to describe property ownership, social welfare, or individual satisfaction and pleasure, explaining such phenomena solely in terms of utility remains problematic. That said, our work contributes to reducing the fragmentation of utility analyses, facilitating comparison among alternative approaches and providing implications for public policy. 3. Evolution of the Utility Concept The concept of utility has evolved across the history of economic thought along with significant changes in its meaning (Broome,1991) even if we think that significant changes in the meaning of utility can be interpreted as parallel and coexisting meanings rather than substitutions. Broome starts from Bentham’s original definition of utility, which is inherent in goods: “By utility is meant that property in any object, whereby it tends to produce benefit, advantage, pleasure, good, or happiness . . . or . . . to prevent the happening of mischief, pain, evil, or unhappiness to the party whose interest is considered”. Initially, utility referred to the property of an object that tends to produce benefit, advantage, pleasure, or happiness or to prevent harm, pain, or unhappiness (Bentham,1996). It is worth noting that although Bentham is remembered as the founder of the hedonistic tradition, he does not offer a single definition of well-being but understands pleasure and pain as abbreviations of broader categories of value and disvalue. Furthermore, some of the terms he uses refer to a clearly hedonic utility (pleasure, good, and happiness in the positive sense, and pain, evil, and unhappiness in the negative sense), while others refer Economies 2025,13, 283 4 of 20 to a utility that is not necessarily only hedonic (benefits and advantages in the positive sense, harm in the negative sense). The dentist’s drill and the nurse’s syringe undoubtedly produce benefits and advantages, but hardly any pleasure. A first conceptual change occurred from this definition of utility as an object’s capacity to generate benefit. Pleasure and pain should therefore be understood as abbreviations of broader categories of value and disvalue, making the measurement of individual wellbeing more operational. Gradually, utility came to be understood not as the capacity of a good to produce benefit, but as the actual benefit generated for the owner. This interpretation has led to individual utility being considered the sum of the benefits obtained from the goods, measuring individual well-being more operationally, at least in theory. The second change concerns the introduction of the axiomatic approach to revealed preferences, and a new approach emerged in which well-being is conceived as a subjective state of happiness, commonly measured through indicators of subjective well-being. While the concept of happiness has evolved remarkably, up to becoming closely associated with the economic concept of utility, influenced by philosophy, psychology, sociology, and economics (Semenov & Nedeljkovi´c,2023), the convergence may be explained by the use of the term within the revealed preference approach. Happiness may involve utility and measurement challenges, with potential for subjective and objective approaches (Ramrattan & Szenberg,2021). Eudaimonic utility (from Aristotle’s concept of eudaimonia, which, unlike the preSocratic hedonists, does not identify happiness with pleasure but with a virtue-oriented life) considers well-being as the result of a life lived in accordance with one’s values, development of one’s potential and the achievement of meaningful goals (Huta,2016;Ryan & Deci,2001). Notwithstanding, well-being can be understood as a broader construct that integrates both elements (Henderson et al.,2013;Joshanloo et al.,2020;Pancheva et al., 2020) and reflects both the hedonic and eudaimonic components. If utility is understood as a good’s capacity to generate positive mental states, then it is not surprising that the hedonic benefit received by an individual comes to be considered utility and, by extension, that individual utility is defined as the sum of benefits derived from the goods possessed. An instrumental conception of utility refers to the objective properties of goods that have utility insofar as they produce material benefits. From an instrumental to an outcome conception, the change in meaning was made possible by an underlying shift from an objective/material view of utility to a subjective/hedonic view. Therefore, verifying the authors’ use of the term before Bentham is important. For example, Adam Smith adopts an objective and instrumental conception of utility in The Wealth of Nations, which he calls value in use (Winfrey,1993). A similar view is found in Hume, which distinguishes the useful from the immediately agreeable, recognising that, alongside utility as the basis of moral approval, there are qualities that people approve of simply because they are pleasant, either to those who possess them or to others (Sidgwick, 2011). Smith’s objective conception of utility is consistent with that of Aristotle, where it is stated that wealth is not, manifestly, the good we seek since it is used to procure other things; in this regard, Aristotle’s works also shed light on the meaning of money (Crespo, 2020) and its role. Here, the utility of material goods is understood in an instrumental and objective sense; it is worth noting that Aristotle also uses the Greek term chreia, which also has a subjective connotation, and Smith also acknowledges the special pleasure of mutual sympathy that can be described as an intersubjective or procedural source of utility. Chrematistic indicates the IU of goods, referring to the term that designates wealth. This objective view of utility has been progressively replaced by a subjective conception— utilitarianism. This shift can already be seen in Ricardo’s writing (Cremaschi,2004), in which utility is not the measure of exchange value, yet is essential. The distinction between Economies 2025,13, 283 5 of 20 use value and exchange value, made by classical economists, more clearly articulates the reasons for use value and exchange, while also revealing that the value of goods has a social content beyond the individual–object relationship. If a product or a service were useless, that is, if it could not possibly contribute to our satisfaction, it would have no exchange value, regardless of how rare it might be or how much effort it might take to obtain it (Ricardo,2014;Robinson & Sraffa,1951). A subjective conception of utility was also formulated by Mill, when he stated that the utility of a good in the estimation of the purchaser represents the extreme limit of its exchange value: a higher value is not possible, except in exceptional circumstances (Mill,2010). For Mill, the value attributed to use is identified with the individual’s maximum willingness to pay. The above-mentioned considerations lead to a dual conception of utility. On the one hand, utility is linked to objective properties—for example, the nutritional value of food, which affects physical and material well-being; similarly, the protective capacity of a vaccine or the curative power of a medicine. On the other hand, utility is associated with the subjective representation of certain qualities—such as the adherence of a good to aesthetic or cultural standards—that generate hedonic well-being. Willingness to pay, therefore, incorporates both components without implying that the objectivity and subjectivity of the sources of utility are ontologically equivalent. In this context, influences of marginalism and mathematical formalisation expanded as the concept of utility developed initially as an alternative to the classical labour theory of value. A significant economic methodological choice in its treatment of the concept of utility is methodological individualism, which is very important for the concept of utility (Kjosavik,2003). Authors such as Pareto (McLure,2008), Pantaleoni (Becattini,2018) and Edgeworth (Samuels,1992) played a remarkable role in its formalisation in the neoclassical tradition. Indeed, Pareto marks a turning point by introducing the order of preferences (McLure,2000; Ventura et al.,2016) and prominent authors, including, among others, Jevons, Menger and Walras, represent the initial phase of neoclassicism while conceiving utility as measurable (Moscati,2013). An example of this approach is Edgeworth’s proposal, who theorised a hedonimeter to directly measure the pleasure or pain experienced by individuals, expressing the ambition to measure well-being as an observable quantitative quantity (Colander,2007;Skyrms & Narens, 2018). To the same token, Pantaleoni maintains a hedonistic basis while adopting marginalist reasoning (Flux et al.,1898), and it is worth mentioning the contribution of Mazzola, who, somehow anticipating the modern theory of public goods, stipulated the principle that the provision of public services should be guided by marginal cost (Fausto,2008). Marginalists conceived utility as a quantity measurable in cardinal terms, allowing comparisons between goods and individuals. With Pareto’s contribution, utility became measurable in ordinal terms, i.e., as an ordering of preferences (Batley,2007). This transition made it possible to formalise consumer purchasing choices outside of psychological measurements, giving shape to the axiomatic framework of revealed preferences central to neoclassical economics. The framework contains a number of different theories (Hands,2014), including the prominent Samuelson’s contribution to the consumer’s choice paradigm (Houthakker, 1950), in which utility becomes a formal tool of economic analysis. The consolidation or ordinal utility can also be seen in Robbins’s concept of economics as decision science (Shizgal,2012). Incorporating the approaches of neoclassical economists to the measurability of utility, the concept has become a formal tool in economic analysis. That said, methods relating to the measurability of utility have been criticised (Blaug,1993). Economies 2025,13, 283 6 of 20 This non-exhaustive resume shows how utility has shifted from an objective property of goods to a subjective state and finally to a formal tool of choice theory, and is helpful for the approaches discussed in the following sections. 4. Utility Approaches The material and psychological nature of the concept of utility reveals a more complex view of individual and collective well-being. We explore this complexity, examining the influence of dual utility on utilitarian thinking, the distinction between the outcome utility and that of processes, and the relationship between instrumental and HU, while the revealed preference approach shows how utility can be treated as an ordinal construct, independent of direct psychological or normative interpretations 4.1. Dual Utility and Its Influence on Utilitarianism and Consequentialism The dual nature of utility facilitates a more straightforward interpretation of many economic phenomena. First, there is often a trade-off between IU and HU: goods with high IU, such as water, tend to have a negligible hedonic component, which explains the low willingness to pay and the resulting low exchange value (Seol & Kim,2022;Shao & Li,2021). Conversely, goods with high hedonic content, e.g., diamonds in the well-known Smith example, often lack instrumental properties while generating a high willingness to pay. Second, the fact that goods with high IU but low HU have a low subjective valuation does not imply that consumers completely disregard their objective characteristics, or that they are not relevant. For example, a cooking pot is useful in a practical sense, but it does not usually generate hedonistic mental states in those who use it. These effects also include those associated with goods that have purely technical or instrumental functions. These considerations regarding the relationship between goods and individuals through the lens of dual utility are illustrated in Figure 1as an adaptation of a diagram proposed by Collard and Sen (1984). The main changes are as follows: (i) the distinction between the two categories of utility, practical/objective and hedonic/subjective, represented separately; (ii) the differentiation between instrumental and hedonic functions. Figure 1. Concepts involved in the relationship between goods and people. Source: The authors. As mentioned above, some goods are characterised by high IU and low HU, while others essentially generate subjective utility, with no significant objective benefits. Goods Economies 2025,13, 283 7 of 20 that activate only one of the two components are rare, while goods that produce opposing effects are more common because of the mentioned trade-off. A paradigmatic example of goods that generate exclusively IU is a crucial drug for treating a specific disease. Its consumption does not produce any HU, yet individuals are willing to pay for it. In this scenario, the perceived utility is entirely attributable to the good’s functional properties. The subsequent recovery will also produce hedonic effects, but these are indirect effects compared to the use of the drug. Examples of goods that generate exclusively HU can be vintage cars kept by collectors or prototypes exhibited at motor shows. These goods have no IU but are desirable to individuals who derive aesthetic, symbolic, or identity satisfaction from their possession. Collectable items, such as stamps and coins no longer in circulation, are examples of HU: their original function has ceased to exist, but a willingness to pay for them remains, reflecting emotional, symbolic, or cultural value. The drug mentioned above may also be an example of goods with positive IU and negative HU; e.g., it may be unpleasant to taste or cause unpleasant sensations when taken. One would experience an objective benefit in terms of health, but this benefit is accompanied by a subjective disvalue linked to the sensory experience. The complexity increases if the drug, while producing a health improvement, causes side effects, e.g., a radiation therapy or a vaccine. In this scenario, positive IU, negative but with low impact IU, and negative HU coexist, involving subjective assessments that must mediate between conflicting effects. Numerous cases fall into the category of goods with negative IU and positive HU, such as reckless driving or high-risk sports. Addictions, e.g., to alcohol or smoking, also belong to this class. In all these cases, individuals are subject to objective disvalue, potentially harming their health or safety. Still, they perceive a mental or emotional benefit sufficient to compensate for these risks, at least in the short term. Table 1contains a formal representation of the four categories of goods, based on Equation (1), i.e., a utility function comprising two components, where Uis the total utility perceived by the subject, Ui , reflects the IU, and Uh, stands for the HU. U=Ui+Uh(1) Table 1. Some approaches to utility. Type Cases Category IU HU IU HU Goods with only IU >0 =0 Effective drug with no hedonic impact Value based solely on functionality Goods with only HU =0 >0 Non-functional collectable car, rare stamp No instrumental function Positive IU, negative HU >0 <0 Effective but unpleasant medicine with side effects Hedonic discomfort reduces overall value Negative IU, positive HU <0 >0 Harmful but tasty foods, alcohol, drugs, smoking, reckless driving Subjective pleasure outweighs potential objective harm Source: the authors. It should be noted that equations representing utility are formalised as the sum of the components, assuming they are linearly separable. This simplification is relevant because, e.g., nonlinearities, threshold effects, or interactions between components could be considered. Therefore, although we adopt this separability for clarity, richer functional forms could capture more complex relationships. This simplification is relevant because, e.g., nonlinearities, threshold effects, or interactions between components could be considered. Economies 2025,13, 283 8 of 20 Therefore, although we adopt this separability for clarity, richer functional forms could capture more complex relationships. Table 1resumes the utility (Ui,Uh) , according to a class of goods., according to a class of goods. The dual nature of utility creates theoretical issues for utilitarianism. In particular, the hedonic approach overlooks the effects of the availability of the material foundations for well-being that do not generate mental perceptions and, therefore, do not constitute psychological experiences. Material well-being does not necessarily coincide with psychological well-being; hence, the two dimensions should be assessed separately. For example, an air conditioning machine improves well-being. However, although material benefits persist over time, psychological benefits tend to fade with habit. Conversely, a machine failure reduces well-being at both levels. More generally, welfare approaches tend to consider OU, neglecting two elements: HU can also be derived from the processes that lead to the outcome, and relational goods can be produced by interpersonal interactions not aimed at specific outcomes. Thus, while material goods generate well-being only when obtained, psychological effects can arise from the availability of these goods and the path to obtaining them (Hahn, 1982;Stutzer & Frey,2006). Furthermore, communicative interaction between people, linguistic exchange instead of commercial exchange, is procedural and can lead to Pareto improvements without changing outcomes. These exchanges do not alter material wellbeing but affect subjective well-being. Thus, the utility can be considered a complex set of at least four components: outcome IU, outcome HU, procedural, and communicative utility. Equation (2) formalises the utility function into a four-component form as argued, where U i,o is the IU from the outcome, followed by three HU: U h,o from the outcome, U h,pr refers to procedure, and Uh,com the communicative. U=Ui,o+Uh,o+Uh,pr +Uh,com (2) Classical utilitarian theories that focus primarily on U h,o neglect stable levels of material well-being U i,o, the relevance of procedures U h,pr , and the role of relational and communicative goods Uh,com. Similarly, traditional welfarism risks assessing quality of life solely based on tangible and perceived outcomes, ignoring pathways and relationships Uh,com. 4.2. Outcome and Procedural Utility If we do not consider the goods achieved in the outcome as the only source of utility, we must also examine the types of well-being that are not derived from outcomes (Kaminitz, 2017). Indeed, people also value the procedures that lead to the outcomes (Frey,2004). Hahn, for example, proposes three examples in which the same outcome can be achieved through different paths: choosing or being forced to take a job with certain characteristics and remuneration, choosing or being forced to participate in a dangerous military mission, and choosing or being forced to allocate part of one’s income to a charitable cause (Hahn, 1982). In all these cases, the outcomes are identical, but the process that made them possible changes. Even if individuals chose the same options, it is intuitively acceptable that they would prefer to arrive there through free rather than compulsory action. Accordingly, an individual’s utility function depends not only on the goods obtained Qthrough an action A, that is Ui=Ui(Qi(A)) but also on the utility derived from the action itself, which can be formalised as Ui=Ui(A,Qi(A)) : For instance, the classical Greek hero who voluntarily sacrifices himself in battle to defend his polis is a paradigmatic case in which the hedonic utility of the action itself exceeds the disutility, hedonic and otherwise, of the loss of life itself. The same cannot be said of the World War I infantryman sent, by his commanders, to die in futile assaults. Economies 2025,13, 283 9 of 20 Removing the possibility of choice changes the utility, even if the goods obtained remain unchanged. While not a radical change, the introduction of PU could have significant implications for the analysis of welfare economics and the effectiveness of welfare systems. 4.3. Hedonic and Instrumental Utility The utility of autonomy is one of several possible forms of PU, and some recent developments are worth considering since individuals evaluate actual outcomes and also the conditions and processes that lead to them (Frey & Stutzer,2000). The economic concept of utility is outcome-oriented, where individual utility is seen in terms of the benefits and costs associated with instrumental outcomes. In contrast, PU refers to processes’ noninstrumental, positive, and negative satisfaction. The authors highlight PU’s psychological nature, contrasting it with IU, characterising the outcome; PU emphasises the utility’s hedonic content. They also link the concept of PU to the sense of self and self-esteem, which influence people’s well-being and are conditioned by decision-making processes and interactions with institutions and other individuals. This can be summarised as a dual conception of utility, which, starting from the concept in (Frey & Stutzer,2000) is depicted in Figure 2. Figure 2. Hedonic PU and the OU. Source: the authors. While we agree with the distinction highlighted in Figure 2and the importance of the well-being derived from the treatment individuals experience within institutionalised processes, we believe the scheme can be implemented as depicted in Figure 3(Implementation of the distinction of utility referred to in Figure 2, with the addition of four other types of utility that influence human well-being). This scheme includes the different types of utility that can affect human well-being, when well-being is understood sufficiently broadly and when the interactions among individuals and between individuals and institutions are considered. A distinction is made between procedural, instrumental, hedonic, and other forms of utility related to interactions between individuals and institutions. Figure 3retains the distinction between the utilities introduced in Figure 2(level 2) and four are added. It should be noted that the diagram is intended to represent only the welfare effects that accrue for an individual as a result of actions, while, in general, it is clear that even thoughts that do not translate into actions are capable of generating hedonic effects, both positive and negative. Actions that can influence a person’s well-being fall into different categories based on who undertakes them: the same beneficiary of the welfare effect, a collective institution, a different person with whom there are affective links, such as to entail an interdependence of utilities. In the first case, i.e., beneficiary, the utility can be further separated into the following types: • PU arises from the method selected to act, as outlined in Figure 3(U1). Consider the task of lawn mowing: an individual can either perform the task personally or outsource it, e.g., pay for a garden maintenance service. If the individual experiences Economies 2025,13, 283 16 of 20 procedures that lead to those outcomes, especially in the revealed preference approach, where utility is interpreted as a formal representation of choices. Without investigating subjective motivations, this approach allows consumers to integrate their outcome’s chrematistic and hedonic components into their evaluations. However, it ignores PU by failing to consider what is not directly reflected in outcomes, and this becomes problematic when the theory refers to public choices. In other areas, procedural components, such as communicative ones, may be central to assessing wellbeing. In this sense, the choices do not always reflect the states that maximise overall utility. For example, an individual may prefer outcome X to state Y, not because X is better, but because Y involves a procedural violation. This calls into question the assumption of a double bind between choices, preferences, and well-being. Equating choice with consent is misleading: an agent may choose one outcome over another without consenting to the first, e.g., when choices are imposed. Preferences can be described so that their correspondence with choices is preserved, or to keep them in line with well-being as understood by the individual in question; however, it is not generally possible to guarantee both simultaneously. It is reasonable to assume that, all other things being equal, an individual prefers a more useful outcome and that their choices reflect these preferences. However, it cannot be assumed that preferences–choices and preferences–well-being always coincide, especially in the presence of procedural effects. Scholars employ many empirical approaches to obtain information on well-being (Bosworth et al.,2024). Consistently, the happiness and economics approach recovers a hedonic conception of utility by directly measuring subjective well-being using surveys widely used in contemporary research (Dziechciarz,2024). Our argument is twofold: first, to recover the distinction between CU and HU; second, to extend the notion of PU from institutionalised contexts to individual actions and intersubjective relationships. Both extensions open up interpretative spaces in established economic theories. Existing theoretical cornerstones of economics, such as expected utility theory and game theory, generally define preferences in terms of monetary gains and, in any case, achievable outcomes. The idea that outcomes are the only utility source and the sole driver of behaviour has become rare in economics. Yet individuals also care about how outcomes are generated; these process preferences generate PU. The reconstruction of the conceptual evolution of utility shows that each level adds specific implications. The objective dimension highlights the role of basic needs and underpins arguments about redistribution and welfare guarantees. The subjective dimension emphasises the heterogeneity of individual preferences; to this extent, there is evidence of preference conformism (Fatas et al.,2018) and the centrality of satisfaction. The procedural dimension reveals how decisions are made, and the resulting recognition can generate utility. The distinction between OU and PU, therefore, invites us to reconsider the validity of OU as a sufficient basis for collective choices, a validity that appears weakened once procedural aspects are acknowledged. At the same time, the distinction between CU and HU raises further questions about the legitimacy of collective choices made by coercive institutions. Recognising the priority of CU, linked to the satisfaction of basic needs, provides a stronger justification for redistributive policies than the utilitarian framework relying solely on the hypothesis of decreasing marginal utility of income. On the one hand, the state generates utility through institutional processes; on the other hand, if taxation and welfare systems are adequately defined, it produces redistributive effects that transform the mainly HU of taxpayers into the mainly CU of beneficiaries. Since Bismarck and early 20th-century social liberalism, welfare systems have always aimed to satisfy the essential, and therefore material, needs of the most disadvantaged classes, rather than to generate HU for them as a substitute for Economies 2025,13, 283 17 of 20 market choices they cannot afford. These perspectives suggest that public policy design benefits from recognising outcomes, processes and symbolic aspects of choices. 7. Conclusions By addressing the conceptual fragmentation that characterises the debate on utility, we discussed how different theoretical traditions have interpreted utility and well-being, the convergences and divergences in the contemporary literature, and the corresponding public policy implications. Despite the plurality of approaches, it is possible to identify common elements and complementarities that provide a basis for coherent reflection. From an academic point of view, this clarifies the theoretical foundations of the concept of utility; from a practical point of view, it suggests that policies, beside short term outcomes, should focus on building structural conditions for individual and collective well-being. Recovering the distinction between CU and HU principles while acknowledging the role of PU provides useful interpretative tools and strengthens the justification for public policies. From a public policy perspective, we point out that well-defined institutions, distributive justice, and welfare systems, play a remarkable role in transforming taxpayers’ HU into the CU of beneficiaries, enhancing, in turn, the effectiveness and efficiency of public polices. Author Contributions: The authors jointly contributed to the article conceptualization, formal analysis, and writing. All authors have read and agreed to the published version of the manuscript. Funding: This research received no external funding. Institutional Review Board Statement: Not applicable. Informed Consent Statement: Not applicable. Data Availability Statement: Not applicable. Conflicts of Interest: The authors declare no conflicts of interest. References Achime, N. H. (1990). Book review: Human desire and economic satisfaction. Review of Radical Political Economics,22(2–3), 296–298. [CrossRef] Adler, M. D., Dolan, P., & Kavetsos, G. (2017). Would you choose to be happy? 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