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Hedonic Capital

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Author Info
Liam Graham () (University College London)
Andrew J. Oswald () (University of Warwick and IZA Bonn)

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Abstract

This paper proposes a new way to think about happiness. It distinguishes between stocks and flows. Central to the analysis is a concept we call ‘hedonic capital’. The paper sets out a model of the dynamics of wellbeing in which bad life-shocks are smoothed by the drawing down of hedonic capital. The model fits the patterns found in the empirical literature: the existence of a stable level of wellbeing and a tendency to return gradually towards that level. It offers a theory of hedonic adaptation.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2079.

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Length: 37 pages
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2079

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Related research
Keywords: adaptation; wellbeing; evolution; happiness; habituation;

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Find related papers by JEL classification:
D1 - Microeconomics - - Household Behavior
I3 - Health, Education, and Welfare - - Welfare and Poverty

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Frijters, Paul & Johnston, David W. & Shields, Michael A., 2008. "Happiness Dynamics with Quarterly Life Event Data," IZA Discussion Papers 3604, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Claudia Senik, 2006. "Is man doomed to progress?," PSE Working Papers 2006-12, PSE (Ecole normale supérieure), revised May 2007. [Downloadable!]
    Other versions:
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