On the weighting of homo economicus and homo virtus in human behaviour

The paper addresses the limitation of the standard homo economicus construct—which assumes rational, preference-ordered, utility-maximizing behavior—in explaining the complexity of human actions. Drawing on Aristotelian virtue ethics and broader conceptions of human motivation, the authors introduce homo virtus to encompass moral, ethical, emotional, and social drivers of behavior. The study’s purpose is to empirically quantify the relative weights of economic (homo economicus) and noneconomic (homo virtus) motivations in determining wellbeing. It proposes and estimates a utility model that integrates both dimensions and tests three hypotheses: (a) the contributions of economic and noneconomic factors can be assessed quantitatively via a complex utility model; (b) the estimated coefficients for economic and noneconomic perspectives are statistically significant; and (c) the emotional basis of wellbeing varies by country context.

The conceptual background reviews classical and modern utility theory (Bernoulli, Quesnay; von Neumann–Morgenstern axioms; risk aversion by Pratt and Arrow; and subsequent developments). Critiques of a mono-utility, purely rational maximization framework are discussed (Etzioni; Schumpeter), emphasizing multiple sources of utility including morality. The homo virtus lineage is traced to Aristotle’s virtue ethics and the habituation hypothesis, as well as modern extensions like self-realization and needs hierarchies (Maslow). Broader behavioral conceptions (homo politicus, psychologicus, socialis, religiosus) illustrate behavioral complexity beyond income/consumption. Moral self-awareness models (Aquino & Reed; Friedland & Cole) and the moral crowding-out literature (Frey & Jegen; Sandel; Bowles) suggest market incentives can displace moral motivations. The emotional wellbeing (WB) function of Parada-Daza conceptualizes utility as an upper envelope of a classic economic utility and a sinusoidal component capturing noneconomic factors, yielding upper (maximum utility, no sacrifice) and lower (minimum acceptable utility) bounds that frame emotional wellbeing dynamics.

Model: Emotional wellbeing WB_it = a0 + a1·Ln(w_it) + a2·Sin(π·w_it), with a1 + a2 = 1. Here, a1 is the weight on the economic (homo economicus) component and a2 the weight on the noneconomic (homo virtus) component. a0 captures baseline emotional satisfaction from community/public goods. The upper envelope (maximum satisfaction) and lower envelope (minimum acceptable satisfaction) are defined per Parada-Daza and Parada-Contzen (2013b), framing the sinusoidal WB curve between them. Data: Country-level panel proxies for wellbeing: (1) BCG’s Sustainable Economic Development Assessment Well-Being Index (WBI), 2008–2018; (2) Centre for the Study of Living Standards Index of Economic Well-Being (IEWB), 1980–2014, for 14 OECD countries; (3) World Happiness Report Happiness Score (HS) from Gallup World Poll, 2005–2018. Wealth/relative wealth shares (w) and macro controls are used; summary statistics include GDP and auxiliary controls (Y, X). Samples: Global (all available countries), and subsamples: OECD, Europe, developing countries (IMF), Latin America, Americas, Asia, Africa, and Arabic countries, depending on availability. Estimation: Linear regressions of wellbeing measures on Ln(w) and Sin(π·w) imposing a1 + a2 = 1 to retrieve weights. Specifications include year fixed effects and country fixed effects where applicable; clustered standard errors are used. Goodness of fit (adjusted R²) and F-statistics are reported. The envelope functions are computed from estimated coefficients to illustrate maximum/minimum satisfaction bounds and the sinusoidal wellbeing path.

• Overall weighting: On average across measures and samples, homo virtus accounts for about 11% and homo economicus for about 89% of wellbeing. - BCG WBI (2008–2018): All countries: a1=0.748 (economic 74.8%), a2=0.252 (virtus 25.2%), highly significant; Europe: a1=0.841 (virtus 15.9%); OECD: a1=0.867 (virtus 13.3%); Developing (IMF): a1=0.574 (virtus 42.6%); Latin America: a1=0.286 (virtus 71.4%); Arabic countries: a1=0.933 (virtus 6.7%). Models show very high fit (Adj. R² often >0.95). - CSLS IEWB (1980–2014, 14 OECD): All countries with year & country FE: a1=0.984 (economic 98.4%), a2=0.016 (virtus 1.6%), Adj. R²≈0.9965. Without FE, economic weights remain high (e.g., a1=0.845). - World Happiness Score (2005–2018): All countries: a1=0.933 (virtus 6.7%); Europe: a1=0.984 (virtus 1.6%); OECD: a1=0.991 (virtus 0.9%); Developing (IMF): a1=0.839 (virtus 16.1%); Latin America: a1=0.862 (virtus 13.8%); Arabic: a1=0.937 (virtus 6.3%). Africa shows nonsignificant economic coefficient in this specification. - Cross-sample pattern: Richer regions (Europe, OECD, Arabic countries) place higher weight on economic factors than developing and Latin American countries. - Envelope implications: The maximum level of emotional satisfaction (no economic sacrifice, upper envelope) is higher for European and OECD countries than for developing countries when using WBI; the gap between upper and lower envelopes narrows where homo virtus weight is small (e.g., OECD in HS and IEWB), indicating behavior closer to rational maximization. - Robustness across measures: Despite conceptual differences across wellbeing indices, the pattern of higher economic weighting in richer contexts consistently emerges.

Findings support the view that market incentives can crowd out moral/noneconomic motivations (moral crowding-out). In richer economies where market mechanisms are more salient, the economic dimension dominates wellbeing determination. Comparison-income effects likely reinforce this: societies exposed to higher reference standards emphasize economic gains, increasing the economic weight. Differences across regions align with self-realization frameworks, where community norms and developmental stages shape which needs and values dominate. Rapidly growing economies (e.g., some Arabic countries) also show high economic weighting, consistent with strong market incentive design during growth phases. The envelope analysis illustrates that when economic weighting is high, the difference between maximum utility (no sacrifice) and wellbeing under emotional considerations is small, indicating behavior close to neoclassical rational maximization. Conversely, in developing regions, larger homo virtus weights produce wider sinusoidal ranges, suggesting greater role for ethical, social, and emotional factors.

The study quantifies the weights of economic and noneconomic (virtue-based) motivations in wellbeing. On average, homo virtus accounts for 11% and homo economicus for 89%. Richer regions (Europe, OECD, Arabic countries) emphasize economic factors more than developing and Latin American countries. The envelope analysis shows higher maximum emotional satisfaction for European/OECD than developing countries (for WBI) and generally narrower gaps where economic weighting is dominant. The contribution lies in providing globally comparable empirical weights for behavioral dimensions across regions. Future research should explore causal drivers of cross-regional differences (economic, moral, cultural), develop instruments to directly measure levels of self-realization, and refine wellbeing metrics that can disentangle and rank component dimensions to more precisely quantify the homo virtus perspective.

• Wellbeing indices (WBI, IEWB, HS) differ conceptually and in construction; they capture overlapping but distinct phenomena and are not directly comparable. - Indices aggregate multiple dimensions without ranking them, preventing identification of which components drive virtuous self-realization versus other aspects of wellbeing. - Lack of direct measures of self-realization levels limits testing of related theoretical predictions. - Regional/sampling constraints (e.g., IEWB limited to 14 OECD countries) may affect generalizability. - In some subsamples (e.g., Africa in HS), economic coefficients are not significant, limiting inference for those contexts.