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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
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  1. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-31, November.
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  8. Wilson, Chris M & Oswald, Andrew J, 2005. "How Does Marriage Affect Physical and Psychological Health? A Survey of the Longitudinal Evidence," The Warwick Economics Research Paper Series (TWERPS) 728, University of Warwick, Department of Economics.
  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. 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.
  11. 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..
  12. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  13. Richard A. Easterlin, 2005. "Is There an "Iron Law of Happiness"?," IEPR Working Papers 05.8, Institute of Economic Policy Research (IEPR).
  14. Clark, Andrew E., 1999. "Are wages habit-forming? evidence from micro data," Journal of Economic Behavior & Organization, Elsevier, vol. 39(2), pages 179-200, June.
  15. Alois Stutzer, . "The Role of Income Aspirations in Individual Happiness," IEW - Working Papers 124, Institute for Empirical Research in Economics - University of Zurich.
  16. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags and Leads in Life Satisfaction: A Test of the Baseline Hypothesis," SOEPpapers on Multidisciplinary Panel Data Research 84, DIW Berlin, The German Socio-Economic Panel (SOEP).
  17. 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.
  18. Larry Samuelson, 2004. "Information-Based Relative Consumption Effects," Econometrica, Econometric Society, vol. 72(1), pages 93-118, 01.
  19. Easterlin, Richard A., 2005. "A puzzle for adaptive theory," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 513-521, April.
  20. Daniel Kahneman & Robert Sugden, 2005. "Experienced Utility as a Standard of Policy Evaluation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(1), pages 161-181, 09.
  21. Luis Rayo & Gary S. Becker, 2007. "Evolutionary Efficiency and Happiness," Journal of Political Economy, University of Chicago Press, vol. 115, pages 302-337.
  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. Michael Grossman, 1999. "The Human Capital Model of the Demand for Health," NBER Working Papers 7078, National Bureau of Economic Research, Inc.
  24. Oswald, Andrew J. & Powdthavee, Nattavudh, 2006. "Does Happiness Adapt? A Longitudinal Study of Disability with Implications for Economists and Judges," IZA Discussion Papers 2208, Institute for the Study of Labor (IZA).
  25. 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.
  26. Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification," American Economic Review, American Economic Association, vol. 94(3), pages 730-740, June.
  27. Joel Sobel, 2002. "Can We Trust Social Capital?," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 139-154, March.
  28. Bruno S. Frey & Stephan Meier, 2004. "Social Comparisons and Pro-social Behavior: Testing "Conditional Cooperation" in a Field Experiment," American Economic Review, American Economic Association, vol. 94(5), pages 1717-1722, December.
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