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Happiness Dynamics with Quarterly Life Event Data

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Author Info

  • Frijters, Paul

    ()
    (University of Queensland)

  • Johnston, David W.

    ()
    (Monash University)

  • Shields, Michael A.

    ()
    (Monash University)

Abstract

This paper addresses the question of when and to what extent individuals are affected by major positive and negative life events, including changes in financial situation, marital status, death of child or spouse and being a victim of crime. The key advantage of our data is that we are able to identify these events on a quarterly basis rather than on the yearly basis used by previous studies. We find evidence that life events are not randomly distributed, that individuals to a large extent anticipate major events and that they quickly adapt. These effects have important implications for the calculation of monetary values needed to compensate individuals for life events such as crime or death of spouse. We find that our new valuation methodology that incorporates these dynamic factors produces considerably smaller compensation valuations than those calculated using the standard approach.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3604.

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Length: 25 pages
Date of creation: Jul 2008
Date of revision:
Publication status: published as 'Life Satisfaction Dynamics with Quarterly Life Event Data' in: Scandinavian Journal of Economics, 2011, 113 (1), 190 - 211
Handle: RePEc:iza:izadps:dp3604

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Keywords: adaptation; life events; life satisfaction; compensation;

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References

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Citations

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Cited by:
  1. repec:hal:wpaper:halshs-00564821 is not listed on IDEAS
  2. Olga Shemyakina & Anke Plagnol, 2013. "Subjective Well-Being and Armed Conflict: Evidence from Bosnia-Herzegovina," Social Indicators Research, Springer, Springer, vol. 113(3), pages 1129-1152, September.
  3. Frijters, Paul & Johnston, David W. & Shields, Michael A., 2011. "Destined for (Un)Happiness: Does Childhood Predict Adult Life Satisfaction?," IZA Discussion Papers 5819, Institute for the Study of Labor (IZA).
  4. Francesca Cornaglia & Andrew Leigh, 2011. "Crime and Mental Wellbeing," CEP Discussion Papers, Centre for Economic Performance, LSE dp1049, Centre for Economic Performance, LSE.
  5. Gregori Baetschmann & Kevin E. Staub & Raphael Studer, 2012. "Does the stork deliver happiness? Parenthood and life satisfaction," ECON - Working Papers, Department of Economics - University of Zurich 094, Department of Economics - University of Zurich.
  6. Justina AV Fischer, 2010. "Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects versus Region Fixed Effects," CEIS Research Paper, Tor Vergata University, CEIS 164, Tor Vergata University, CEIS, revised 28 May 2010.
  7. Fischer, Justina AV, 2009. "Happiness and age cycles – return to start…," MPRA Paper 15249, University Library of Munich, Germany.
  8. Robert Rudolf & Sung-Jin Kang, 2011. "Adaptation under Traditional Gender Roles: Testing the Baseline Hypothesis in South Korea," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers, Courant Research Centre PEG 101, Courant Research Centre PEG.
  9. Nattavudh Powdthavee, . "Jobless, Friendless, and Broke: What Happens to Different Areas of Life Before and After Unemployment?," Discussion Papers, Department of Economics, University of York 09/15, Department of Economics, University of York.
  10. Plagnol, Anke C., 2011. "Financial satisfaction over the life course: The influence of assets and liabilities," Journal of Economic Psychology, Elsevier, Elsevier, vol. 32(1), pages 45-64, February.

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