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Hedonic Capital

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Author Info
Graham, Liam (University College London)
Oswald, Andrew J. (University of Warwick)

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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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File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/papers/twerp_745.pdf
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Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 745.

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Length: 35 pages
Date of creation: 2006
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Handle: RePEc:wrk:warwec:745

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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
L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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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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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). [Downloadable!]
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