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Adaptation to Income over Time: A Weak Point of Subjective Well-Being

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  • Christoph Wunder

Abstract

This article holds the view that intertemporal comparisons of subjective well-being measures are only meaningful when the underlying standards of judgment are unaltered. This is a weak point of such measures. The study investigates the change in the satisfaction judgments resulting from adaptation to income over time. Adaptation is defined to be desensitization (sensitization) to the hedonic effect of income resulting from an upward (downward) adjustment of the standards. A framework is introduced that provides empirical estimates for the rate of adaptation using data from the Socio-Economic Panel Study (SOEP).

Suggested Citation

  • Christoph Wunder, 2008. "Adaptation to Income over Time: A Weak Point of Subjective Well-Being," SOEPpapers on Multidisciplinary Panel Data Research 130, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp130
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    References listed on IDEAS

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    Cited by:

    1. Liisa-Maria Palomäki, 2019. "Does It Matter How You Retire? Old-Age Retirement Routes and Subjective Economic Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(2), pages 733-751, April.
    2. Ruut Veenhoven & Felicia Chiperi & Xin Kang & Martijn Burger, 2021. "Happiness and Consumption: A Research Synthesis Using an Online Finding Archive* â€," SAGE Open, , vol. 11(1), pages 21582440209, March.

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    Keywords

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    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

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