IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v117y2012i3p750-752.html
   My bibliography  Save this article

Does subjective well-being dynamically adjust to circumstances?

Author

Listed:
  • Wunder, Christoph

Abstract

This paper introduces a simple model to estimate the dynamic adjustment of subjective well-being that results from an updating of expectations in response to changing circumstances. Empirical evidence indicates that adjustment takes place within a relatively short window of time.

Suggested Citation

  • Wunder, Christoph, 2012. "Does subjective well-being dynamically adjust to circumstances?," Economics Letters, Elsevier, vol. 117(3), pages 750-752.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:750-752
    DOI: 10.1016/j.econlet.2012.08.024
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176512004594
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2012.08.024?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Carol Newman & Liam Delaney & Brian Nolan, 2008. "A Dynamic Model of the Relationship Between Income and Financial Satisfaction: Evidence from Ireland," The Economic and Social Review, Economic and Social Studies, vol. 39(2), pages 105-130.
    2. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags And Leads in Life Satisfaction: a Test of the Baseline Hypothesis," Economic Journal, Royal Economic Society, vol. 118(529), pages 222-243, June.
    3. Bottan, Nicolas Luis & Perez Truglia, Ricardo, 2011. "Deconstructing the hedonic treadmill: Is happiness autoregressive?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(3), pages 224-236, May.
    4. Easterlin, Richard A., 2005. "A puzzle for adaptive theory," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 513-521, April.
    5. Stephen Pudney, 2008. "The dynamics of perception: modelling subjective wellbeing in a short panel," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 171(1), pages 21-40, January.
    6. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
    7. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    8. Van Praag, Bernard M. S. & Kapteyn, Arie, 1973. "Further evidence on the individual welfare function of income: An empirical investigatiion in The Netherlands," European Economic Review, Elsevier, vol. 4(1), pages 33-62, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel Kuehnle & Christoph Wunder, 2016. "Using the Life Satisfaction Approach to Value Daylight Savings Time Transitions: Evidence from Britain and Germany," Journal of Happiness Studies, Springer, vol. 17(6), pages 2293-2323, December.
    2. Piper, Alan T., 2013. "Happiness, Dynamics and Adaptation," MPRA Paper 52342, University Library of Munich, Germany.
    3. Mario Bossler & Sandra Broszeit, 2017. "Do minimum wages increase job satisfaction? Micro-data evidence from the new German minimum wage," LABOUR, CEIS, vol. 31(4), pages 480-493, December.
    4. Lionel WILNER, 2019. "The Dynamics of Individual Happiness," Working Papers 2019-18, Center for Research in Economics and Statistics.
    5. Edsel Beja, 2014. "Income growth and happiness: reassessment of the Easterlin Paradox," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 61(4), pages 329-346, December.
    6. Piper, Alan T., 2014. "The Benefits, Challenges and Insights of a Dynamic Panel assessment of Life Satisfaction," MPRA Paper 59556, University Library of Munich, Germany.
    7. Edsel L. Beja Jr., 2018. "Testing the easterlin paradox: Results and policy implications," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 2(2), pages 79-83, September.
    8. Piper, Alan T., 2018. "Adult life satisfaction: largely (though not wholly) contemporaneous? A System General Method of Moments dynamic panel analysis," MPRA Paper 85601, University Library of Munich, Germany.
    9. Ayllón, Sara & Fusco, Alessio, 2017. "Are income poverty and perceptions of financial difficulties dynamically interrelated?," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 103-114.
    10. David W. Johnston & Olena Stavrunova, 2021. "Subjective Wellbeing Dynamics," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 518-529, December.
    11. Piper, Alan T., 2014. "An Investigation into Happiness, Dynamics and Adaptation," MPRA Paper 57778, University Library of Munich, Germany.
    12. FUSCO Alessio, 2013. "The dynamics of perceived financial difficulties," LISER Working Paper Series 2013-24, Luxembourg Institute of Socio-Economic Research (LISER).
    13. Beja, Edsel Jr., 2018. "Testing the Easterlin Paradox: Results and Policy Implications," MPRA Paper 101075, University Library of Munich, Germany.
    14. Marcus Klemm, 2022. "Well-being Changes from Year to Year: A Comparison of Current, Remembered and Predicted Life Satisfaction," Journal of Happiness Studies, Springer, vol. 23(4), pages 1669-1681, April.
    15. Alan Piper, 2018. "Adult life satisfaction largely (though not wholly) contemporaneous," Discussion Papers 028, Europa-Universität Flensburg, International Institute of Management.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kelsey J. O'Connor, 2020. "Life Satisfaction and Noncognitive Skills: Effects on the Likelihood of Unemployment," Kyklos, Wiley Blackwell, vol. 73(4), pages 568-604, November.
    2. Lionel WILNER, 2019. "The Dynamics of Individual Happiness," Working Papers 2019-18, Center for Research in Economics and Statistics.
    3. Caporale, Guglielmo Maria & Georgellis, Yannis & Tsitsianis, Nicholas & Yin, Ya Ping, 2009. "Income and happiness across Europe: Do reference values matter?," Journal of Economic Psychology, Elsevier, vol. 30(1), pages 42-51, February.
    4. Silvia Maja Melzer & Ruud J. Muffels, 2012. "Migrant's Pursuit of Happiness: The Impact of Adaption, Social Comparison and Relative Deprivation; Evidence from a 'Natural' Experiment," SOEPpapers on Multidisciplinary Panel Data Research 448, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Martin Binder & Felix Ward, 2011. "The Structure of Happiness: A Vector Autoregressive Approach," Papers on Economics and Evolution 2011-08, Philipps University Marburg, Department of Geography.
    6. Mduduzi Biyase & Cephas Naanwaab, 2021. "Rural–Urban Differences in Subjective Well-Being for South Africa: Static and Dynamic Approaches," Economic Development and Well-being Research Group Working Paper Series edwrg-03-2021, University of Johannesburg, College of Business and Economics, revised 2021.
    7. Paleologou, Suzanna-Maria, 2022. "Happiness, democracy and socio-economic conditions: Evidence from a difference GMM estimator," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 101(C).
    8. Chrostek, Pawel, 2013. "An empirical investigation into the determinants and persistence of different types of subjective well-being," MPRA Paper 48292, University Library of Munich, Germany.
    9. Nils Braakmann, 2014. "The consequences of own and spousal disability on labor market outcomes and subjective well-being: evidence from Germany," Review of Economics of the Household, Springer, vol. 12(4), pages 717-736, December.
    10. Biyase, Mduduzi & Naanwaab , Cephas, 2023. "Rural–Urban Differences in Subjective Well-Being for South Africa: Static and Dynamic Approaches," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 48(1), pages 1-30, March.
    11. Piper, Alan T., 2014. "An Investigation into Happiness, Dynamics and Adaptation," MPRA Paper 57778, University Library of Munich, Germany.
    12. Chrostek, Pawel, 2013. "An empirical investigation into the determinants and persistence of happiness and life evaluation," MPRA Paper 50442, University Library of Munich, Germany.
    13. Paweł Chrostek, 2016. "An Empirical Investigation into the Determinants and Persistence of Happiness and Life Evaluation," Journal of Happiness Studies, Springer, vol. 17(1), pages 413-430, February.
    14. FUSCO Alessio, 2013. "The dynamics of perceived financial difficulties," LISER Working Paper Series 2013-24, Luxembourg Institute of Socio-Economic Research (LISER).
    15. Perez Truglia, Ricardo Nicolas & Bottan, Nicolas Luis, 2008. "Deconstructing the Hedonic Treadmill: Is Happiness Autoregressive?," MPRA Paper 20340, University Library of Munich, Germany.
    16. Alan Piper, 2023. "What Does Dynamic Panel Analysis Tell Us About Life Satisfaction?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(2), pages 376-394, June.
    17. Qari, Salmai, 2014. "Marriage, adaptation and happiness: Are there long-lasting gains to marriage?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 50(C), pages 29-39.
    18. Senik, Claudia, 2009. "Direct evidence on income comparisons and their welfare effects," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 408-424, October.
    19. Lars Kunze & Nicolai Suppa, 2014. "Bowling Alone or Bowling at All? The Effect of Unemployment on Social Participation," Ruhr Economic Papers 0510, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    20. Kaiser, Caspar, 2020. "People do not adapt. New analyses of the dynamic effects of own and reference income on life satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 494-513.

    More about this item

    Keywords

    Subjective well-being; Adaptation level; Dynamic panel data model;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:750-752. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.