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Hedonic capital, adaptation and resilience

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Author Info

  • Graham, Liam
  • Oswald, Andrew J.

Abstract

The paper sets out a theory of hedonic adaptation and resilience. By distinguishing between stocks and flows of psychological resources, it suggests a new way to think about the dynamics of human well-being or 'happiness'. Central to the analysis is a concept we refer to as hedonic capital. We build on the idea that the evolutionary function of happiness is as a motivating device. Our model successfully replicates the patterns routinely found in well-being data - particularly the empirical regularity of an approximately stable level of well-being and the adaptive tendency to return towards that level. The formal model provides a number of testable empirical predictions.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 76 (2010)
Issue (Month): 2 (November)
Pages: 372-384

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Handle: RePEc:eee:jeborg:v:76:y:2010:i:2:p:372-384

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Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Adaptation Well-being Evolution Happiness Habituation Resilience;

References

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  1. Luis Rayo & Gary S. Becker, 2007. "Evolutionary Efficiency and Happiness," Journal of Political Economy, University of Chicago Press, vol. 115, pages 302-337.
  2. Wilson, Chris M & Oswald, Andrew J, 2005. "How Does Marriage Affect Physical and Psychological Health? A Survey of the Longitudinal Evidence," The Warwick Economics Research Paper Series (TWERPS) 728, University of Warwick, Department of Economics.
  3. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2003. "Lags and Leads in Life Satisfaction: A Test of the Baseline Hypothesis," Discussion Papers of DIW Berlin 371, DIW Berlin, German Institute for Economic Research.
  4. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2000. "The Economic Approach to Social Capital," NBER Working Papers 7728, National Bureau of Economic Research, Inc.
  5. Oswald, Andrew, 1997. "Happiness and Economic Performance," The Warwick Economics Research Paper Series (TWERPS) 478, University of Warwick, Department of Economics.
  6. Di Tella, Rafael & MacCulloch, Robert J. & Oswald, Andrew J., 2001. "The Macroeconomics of Happiness," The Warwick Economics Research Paper Series (TWERPS) 615, University of Warwick, Department of Economics.
  7. Claudia Senik, 2007. "Is man doomed to progress?," PSE Working Papers halshs-00590519, HAL.
  8. Easterlin, Richard A., 2005. "A puzzle for adaptive theory," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 513-521, April.
  9. Alberto Alesina & Rafael Di Tella & Robert MacCulloch, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," Harvard Institute of Economic Research Working Papers 1938, Harvard - Institute of Economic Research.
  10. Larry Samuelson, 2004. "Information-Based Relative Consumption Effects," Econometrica, Econometric Society, vol. 72(1), pages 93-118, 01.
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  13. Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
  14. Daniel Kahneman & Robert Sugden, 2005. "Experienced Utility as a Standard of Policy Evaluation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 32(1), pages 161-181, 09.
  15. Aslam, A. & Corrado, L., 2007. "No Man is an Island, the Inter-personal Determinants of Regional Well-Being in Europe," Cambridge Working Papers in Economics 0717, Faculty of Economics, University of Cambridge.
  16. Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification," American Economic Review, American Economic Association, vol. 94(3), pages 730-740, June.
  17. Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
  18. Alois Stutzer, . "The Role of Income Aspirations in Individual Happiness," IEW - Working Papers 124, Institute for Empirical Research in Economics - University of Zurich.
  19. Di Tella, Rafael & Haisken-De New, John & MacCulloch, Robert, 2010. "Happiness adaptation to income and to status in an individual panel," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 834-852, December.
  20. Oswald, Andrew J. & Powdthavee, Nattavudh, 2006. "Does Happiness Adapt? A Longitudinal Study of Disability with Implications for Economists and Judges," IZA Discussion Papers 2208, Institute for the Study of Labor (IZA).
  21. Andrew Clark & Fabrice Etile & Fabien Postel-Vinay & Claudia Senek & Karine Van der Straeten, 2004. "Heterogeneity And Measures Of Well-Being: Evidence From Twelve European Countries," Royal Economic Society Annual Conference 2004 58, Royal Economic Society.
  22. Johan Ormel & Siegwart Lindenberg & Nardi Steverink & Lois Verbrugge, 1999. "Subjective Well-Being and Social Production Functions," Social Indicators Research, Springer, vol. 46(1), pages 61-90, January.
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Citations

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Cited by:
  1. Piper, Alan T., 2014. "Sliding down the U-shape? An investigation of the age-well-being relationship, with a focus on young adults," MPRA Paper 55819, University Library of Munich, Germany.
  2. Stutzer, Alois & Frey, Bruno S., 2012. "Recent Developments in the Economics of Happiness: A Selective Overview," IZA Discussion Papers 7078, Institute for the Study of Labor (IZA).
  3. Frey, Bruno S. & Stutzer, Alois, 2013. "Economic Consequences of Mispredicting Utility," IZA Discussion Papers 7430, Institute for the Study of Labor (IZA).
  4. Robert Cummins & Mark Wooden, 2014. "Personal Resilience in Times of Crisis: The Implications of SWB Homeostasis and Set-Points," Journal of Happiness Studies, Springer, vol. 15(1), pages 223-235, February.
  5. Jan-Emmanuel De Neve & Ed Diener & Louis Tay & Cody Xuereb, 2013. "The Objective Benefits of Subjective Well-Being," CEP Discussion Papers dp1236, Centre for Economic Performance, LSE.
  6. Jan-Emmanuel De Neve & Ed Diener & Louis Tay & Cody Xuereb, 2013. "The objective benefits of subjective well-being," LSE Research Online Documents on Economics 51669, London School of Economics and Political Science, LSE Library.
  7. Pugno, Maurizio, 2013. "Scitovsky and the income-happiness paradox," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 43(C), pages 1-10.
  8. Koch, Christian, 2013. "The Virtue Ethics Hypothesis: Is there a nexus between virtues and well-being?," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80054, Verein für Socialpolitik / German Economic Association.
  9. Angelo Antoci & Mauro Sodini & Luca Zarri, 2012. "Relational Consumption and Nonlinear Dynamics in an Overlapping Generations Model," Working Papers 13/2012, University of Verona, Department of Economics.

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