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Adaptation or Social Comparison? The effects of income on happiness

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  • Angeles, Luis

Abstract

Two mechanisms have attracted considerable attention from researchers studying the effects of income on happiness: adaptation and social comparison. In this paper we study both mechanisms using a panel of British households. Besides dealing with the UK case in detail, the paper contributes to the literature by considering the two mecha- nisms together and testing for them both separately and jointly. Our results strongly support the existence of adaptation effects but find only weak evidence in favour of social comparison.

Suggested Citation

  • Angeles, Luis, 2010. "Adaptation or Social Comparison? The effects of income on happiness," SIRE Discussion Papers 2010-03, Scottish Institute for Research in Economics (SIRE).
    • Handle: RePEc:edn:sirdps:136
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    Cited by:

    1. Luis Angeles, 2009. "Adaption and anticipation effects to life events in the United Kingdom," Working Papers 2009_08, Business School - Economics, University of Glasgow.
    2. Adalgiso Amendola & Roberto Dell’Anno & Lavinia Parisi, 2019. "Happiness and inequality in European countries: is it a matter of peer group comparisons?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(2), pages 473-508, July.
    3. Ehsan Latif, 2015. "Happiness Adaptation to Income: Evidence from Canada," Economics Bulletin, AccessEcon, vol. 35(3), pages 1477-1487.

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