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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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File URL: http://www.sciencedirect.com/science/article/B6V8F-50J4M77-2/2/be1b8917afaae959c393144ed9482698
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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. Clark, Andrew E., 1999. "Are wages habit-forming? evidence from micro data," Journal of Economic Behavior & Organization, Elsevier, vol. 39(2), pages 179-200, June.
  2. DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 1999. "The macroeconomics of happiness," ZEI Working Papers B 03-1999, ZEI - Center for European Integration Studies, University of Bonn.
  3. Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
  4. Oswald, Andrew J. & Powdthavee, Nattavudh, 2008. "Does happiness adapt? A longitudinal study of disability with implications for economists and judges," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1061-1077, June.
  5. Alois Stutzer, . "The Role of Income Aspirations in Individual Happiness," IEW - Working Papers 124, Institute for Empirical Research in Economics - University of Zurich.
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  8. 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.
  9. Oswald, A.J., 1997. "Happiness and Economic Performance," Papers 18, Centre for Economic Performance & Institute of Economics.
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  12. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  13. Di Tella, Rafael & Alesina, Alberto & MacCulloch, Robert, 2004. "Inequality and Happiness: Are Europeans and Americans Different?," Scholarly Articles 4553007, Harvard University Department of Economics.
  14. Joel Sobel, 2002. "Can We Trust Social Capital?," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 139-154, March.
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  16. Wilson, Chris M. & Oswald, Andrew J., 2005. "How Does Marriage Affect Physical and Psychological Health? A Survey of the Longitudinal Evidence," IZA Discussion Papers 1619, Institute for the Study of Labor (IZA).
  17. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags and Leads in Life Satisfaction: A Test of the Baseline Hypothesis," SOEPpapers on Multidisciplinary Panel Data Research 84, DIW Berlin, The German Socio-Economic Panel (SOEP).
  18. 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.
  19. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2000. "The Economic Approach to Social Capital," NBER Working Papers 7728, National Bureau of Economic Research, Inc.
  20. Easterlin, Richard A., 2005. "A puzzle for adaptive theory," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 513-521, April.
  21. Graham, Carol & Eggers, Andrew & Sukhtankar, Sandip, 2004. "Does happiness pay?: An exploration based on panel data from Russia," Journal of Economic Behavior & Organization, Elsevier, vol. 55(3), pages 319-342, November.
  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.
  23. 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.
  24. Luis Rayo & Gary S. Becker, 2007. "Evolutionary Efficiency and Happiness," Journal of Political Economy, University of Chicago Press, vol. 115, pages 302-337.
  25. 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.
  26. Michael Grossman, 1999. "The Human Capital Model of the Demand for Health," NBER Working Papers 7078, National Bureau of Economic Research, Inc.
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Cited by:
  1. 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).

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