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Hedonic capital, adaptation and resilience

  • Graham, Liam
  • Oswald, Andrew J.

The paper sets out a theory of hedonic adaptation and resilience. By distinguishing between stocks and flows of psychological resources, it suggests a new way to think about the dynamics of human well-being or 'happiness'. Central to the analysis is a concept we refer to as hedonic capital. We build on the idea that the evolutionary function of happiness is as a motivating device. Our model successfully replicates the patterns routinely found in well-being data - particularly the empirical regularity of an approximately stable level of well-being and the adaptive tendency to return towards that level. The formal model provides a number of testable empirical predictions.

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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 76 (2010)
Issue (Month): 2 (November)
Pages: 372-384

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Handle: RePEc:eee:jeborg:v:76:y:2010:i:2:p:372-384
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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  1. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
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  7. Oswald, Andrew J. & Powdthavee, Nattavudh, 2008. "Does happiness adapt? A longitudinal study of disability with implications for economists and judges," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1061-1077, June.
  8. Claudia Senik, 2007. "Is man doomed to progress?," PSE Working Papers halshs-00590519, HAL.
  9. Di Tella, R. & MacCulloch, R.J.: Oswald, A.J., 1997. "The Macroeconomics of Happiness," Papers 19, Centre for Economic Performance & Institute of Economics.
  10. Rafael Di Tella & John Haisken-De New & Robert MacCulloch, 2007. "Happiness Adaptation to Income and to Status in an Individual Panel," NBER Working Papers 13159, National Bureau of Economic Research, Inc.
  11. Andrew Clark & Fabrice Etile & Fabien Postel-Vinay & Claudia Senek & Karine Van der Straeten, 2004. "Heterogeneity And Measures Of Well-Being: Evidence From Twelve European Countries," Royal Economic Society Annual Conference 2004 58, Royal Economic Society.
  12. Bruno S. Frey & Alois Stutzer, . "What can Economists Learn from Happiness Research?," IEW - Working Papers 080, Institute for Empirical Research in Economics - University of Zurich.
  13. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-31, November.
  14. 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 F222-F243, 06.
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  16. Luis Rayo & Gary S. Becker, 2007. "Evolutionary Efficiency and Happiness," Journal of Political Economy, University of Chicago Press, vol. 115, pages 302-337.
  17. Andrew Clark & Orsolya Lelkes, 2006. "Deliver us from Evil: Religion as insurance," Papers on Economics of Religion 06/03, Department of Economic Theory and Economic History of the University of Granada..
  18. Graham, Carol & Eggers, Andrew & Sukhtankar, Sandip, 2004. "Does happiness pay?: An exploration based on panel data from Russia," Journal of Economic Behavior & Organization, Elsevier, vol. 55(3), pages 319-342, November.
  19. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2000. "The Economic Approach to Social Capital," NBER Working Papers 7728, National Bureau of Economic Research, Inc.
  20. Joel Sobel, 2002. "Can We Trust Social Capital?," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 139-154, March.
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  22. Aslam, A. & Corrado, L., 2007. "No Man is an Island, the Inter-personal Determinants of Regional Well-Being in Europe," Cambridge Working Papers in Economics 0717, Faculty of Economics, University of Cambridge.
  23. Daniel Kahneman & Robert Sugden, 2005. "Experienced Utility as a Standard of Policy Evaluation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 32(1), pages 161-181, 09.
  24. Johan Ormel & Siegwart Lindenberg & Nardi Steverink & Lois Verbrugge, 1999. "Subjective Well-Being and Social Production Functions," Social Indicators Research, Springer, vol. 46(1), pages 61-90, January.
  25. Easterlin, Richard A., 2005. "A puzzle for adaptive theory," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 513-521, April.
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