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Choices Which Change Life Satisfaction: Revising SWB Theory to Account for Change

Author

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  • Bruce Headey
  • Ruud Muffels
  • Gert G. Wagner

Abstract

Using data from the long-running German Socio-Economic Panel (SOEP) 1984-2008, this paper analyses the effects of individual preferences and choices on subjective well-being (SWB). It is shown that preferences and choices relating to life goals/values, partner's personality, hours of work, social participation and healthy lifestyle all have substantial effects on life satisfaction. The results have negative implications for the still dominant theory of SWB, set-point theory. This theory holds that adult SWB does not change in the medium or long term, although temporary fluctuations occur due to specific life events. Set-point theory has come under increasing criticism in recent years, primarily due to unmistakable evidence in SOEP that, during the last 25 years, up to a third of the population has recorded substantial and apparently permanent changes in life satisfaction. It is becoming clear that the main challenge now for SWB researchers is to develop a new theory which can account for medium and long term change, and not merely stability in SWB. Set-point theory is limited precisely because it is purely a theory of stability. The paper is based on a specially constructed SOEP file in which data are divided into five 5-year periods in order to facilitate analysis of medium term change.

Suggested Citation

  • Bruce Headey & Ruud Muffels & Gert G. Wagner, 2010. "Choices Which Change Life Satisfaction: Revising SWB Theory to Account for Change," Discussion Papers of DIW Berlin 1010, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1010
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    Citations

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    Cited by:

    1. Thieme, Paula & Dittrich, Dennis Alexis Valin, 2015. "A life-span perspective on life satisfaction," MPRA Paper 64700, University Library of Munich, Germany.
    2. Guven, Cahit & Senik, Claudia & Stichnoth, Holger, 2012. "You can’t be happier than your wife. Happiness gaps and divorce," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 110-130.

    More about this item

    Keywords

    SWB; set-point theory; life goals; individual choice; panel regression analysis; SOEP;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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