T HE purpose of this paper is to report a laboratory experiment that measured in a restricted manner the value to individuals of additional money income. Although the notion of utility has long been incorporated in the thinking of economic theoreticians in the form of a hypothetical construct, efforts to test the validity of the construct have mostly-and in many cases necessarilybeen limited to observations of the behavior of groups of people in situations where utility was but one of many variables. The notion of utility is roughly this: Individuals behave as if they had a subjective scale of values for assessing the worth to them of different amounts of commodities, and this scale is not necessarily merely a stretching or a translation of the" physical" scale in use in the market place. First, there is the question of whether utility can be measured under any circumstances, even in a laboratory situation, and, second, if utility can be measured, can it be used to predict behavior in slightly different situations from those in which it was derived. It should be remarked that, in advance of this experiment, there was no assurance that utility curves could be derived in the laboratory by using administratively feasible amounts of money. Early discussion4 of methods for constructing utility curves was given by

I The authors wish to express their thanks to the Executive Committee of the Laboratory of Social Relations, Harvard University, for the funds necessary to carry out this work. We wish to acknowledge the assistance of Mr. Henry Gerbrands in the design and construction of the apparatus; the contributions of Milton Friedman, LJ Savage, and W. Allen Wallis to the discussions of this experiment; the help of Mrs. Shirley B. Robock in conducting the pilot study; and the work of Mrs. Doris R. Entwisle in assisting with the analysis of the data and the preparation of this report. 2 This paper was presented in Chicago, Illinois, December 27, 195o, at a session jointly sponsored by the American Economic Association, the American Statistical Association, the Econometric Society, and the Institute of Mathematical Statistics.