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Thinking About It: A Note on Attention and Well-Being Losses From Unemployment

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  • P Dolan
  • N Powdthavee

Abstract

This note investigates Schkade and Kahneman's (1998) maxim that "Nothing in life is quite as important as you think it is while you are thinking about it". The paper shows that whilst becoming unemployed hurts psychologically, unemployment has a greater impact on happiness if the person also regards it as an important event that took place in the last year. This finding, particularly if it is replicated for other domains, such as health and income, will have important implications for how we think about the impact of objective circumstances on well-being and about well-being more generally.

Suggested Citation

  • P Dolan & N Powdthavee, 2008. "Thinking About It: A Note on Attention and Well-Being Losses From Unemployment," Discussion Papers 08/17, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:08/17
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    References listed on IDEAS

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    1. repec:pri:cepsud:125krueger is not listed on IDEAS
    2. Daniel Kahneman & Richard H. Thaler, 2006. "Anomalies: Utility Maximization and Experienced Utility," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 221-234, Winter.
    3. Daniel Kahneman & Alan B. Krueger & David Schkade & Norbert Schwarz & Arthur A. Stone, 2006. "Would You Be Happier If You Were Richer? A Focusing Illusion," Working Papers 77, Princeton University, Department of Economics, Center for Economic Policy Studies..
    4. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
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    Cited by:

    1. Picchio, Matteo & Ubaldi, Michele, 2022. "Unemployment and Health: A Meta-Analysis," GLO Discussion Paper Series 1128, Global Labor Organization (GLO).
    2. Andreas Knabe & Ronnie Schöb & Joachim Weimann, 2016. "Partnership, Gender, and the Well-Being Cost of Unemployment," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(3), pages 1255-1275, December.
    3. Edsel Beja, 2015. "The Focusing Illusion and Happiness: Evidence Using College Basketball Championship," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 121(3), pages 873-885, April.
    4. Beja, Edsel Jr., 2013. "Focusing on the Focusing Illusion..," MPRA Paper 44366, University Library of Munich, Germany.

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    More about this item

    Keywords

    Happiness; Well-being; Attention; Focusing illusion; Unemployment;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • I0 - Health, Education, and Welfare - - General

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