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The Half-Life of Happiness: Hedonic Adaptation in the Subjective Well-Being of Poor Slum Dwellers to a Large Improvement in Housing

Author

Listed:
  • Sebastian Galiani

    (University of Maryland and NBER)

  • Paul J. Gertler

    (UC Berkeley and NBER)

  • Raimundo Undurraga

    (New York University)

Abstract

A fundamental question in economics is whether happiness increases pari passu with improvements in material conditions or whether humans grow accustomed to better conditions over time. We rely on a large-scale experiment to examine what kind of impact the provision of housing to extremely poor populations in Latin America has on subjective measures of well-being over time. The objective is to determine whether poor populations exhibit hedonic adaptation in happiness derived from reducing the shortfall in the satisfaction of their basic needs. Our results are conclusive. We find that subjective perceptions of wellbeing improve substantially for recipients of better housing but that after, on average, eight months, 60% of that gain disappears.

Suggested Citation

  • Sebastian Galiani & Paul J. Gertler & Raimundo Undurraga, 2015. "The Half-Life of Happiness: Hedonic Adaptation in the Subjective Well-Being of Poor Slum Dwellers to a Large Improvement in Housing," CEDLAS, Working Papers 0184, CEDLAS, Universidad Nacional de La Plata.
  • Handle: RePEc:dls:wpaper:0184
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    References listed on IDEAS

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    Cited by:

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    2. Clément Bellet, 2017. "Essays on Inequality, Social Preferences and Consumer Behavior," Sciences Po publications info:hdl:2441/vbu6kd1s68o, Sciences Po.
    3. Bellet, Clement, 2017. "The paradox of the Joneses: superstar houses andmortgage frenzy in suburban America," LSE Research Online Documents on Economics 69044, London School of Economics and Political Science, LSE Library.
    4. Clement Bellet, 2017. "The Paradox of the Joneses: Superstar Houses and Mortgage Frenzy in Suburban America," CEP Discussion Papers dp1462, Centre for Economic Performance, LSE.

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    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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