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Adaptation or Social Comparison? The effects of income on happiness

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Listed author(s):
  • 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.

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File URL: http://hdl.handle.net/10943/136
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Paper provided by Scottish Institute for Research in Economics (SIRE) in its series SIRE Discussion Papers with number 2010-03.

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Date of creation: 2010
Handle: RePEc:edn:sirdps:136
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Keywords: Income and happiness; adaptation; social comparison; BHPS;

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  17. Christian Grund & Dirk Sliwka, 2007. "Reference-Dependent Preferences and the Impact of Wage Increases on Job Satisfaction: Theory and Evidence," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(2), pages 313-335, June.
  18. Senik, Claudia, 2004. "When information dominates comparison: Learning from Russian subjective panel data," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2099-2123, August.
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Cited by:

  1. Victoria Reyes-García & Ronnie Babigumira & Aili Pyhälä & Sven Wunder & Francisco Zorondo-Rodríguez & Arild Angelsen, 2016. "Subjective Wellbeing and Income: Empirical Patterns in the Rural Developing World," Journal of Happiness Studies, Springer, vol. 17(2), pages 773-791, April.
  2. Luis Angeles, 2009. "Adaption and anticipation effects to life events in the United Kingdom," Working Papers 2009_08, Business School - Economics, University of Glasgow.
  3. Ehsan Latif, 2015. "Happiness Adaptation to Income: Evidence from Canada," Economics Bulletin, AccessEcon, vol. 35(3), pages 1477-1487.

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